Thread by @ketanmba03

Aurobindo CMP 868
The company is developing:
✍️14 Biosimilars (5 of these expected to launch by FY25 with a US$20 market size)
✍️8 inhalers (US market size is >$10 Bn)
✍️Pneumcoccal Conjugate Vaccine (US$6.2 bn global market size)
✍️3 depot injectables (US$3.3 bn market size)

Co also developing 50 Other Complex generics
✍️Peptides (US$14.5 Bn Mkt size-Global $2.5 bn size for 5 filed ANDAs and Global $12bn for 10 under development)
✍️Topicals (US$4 Bn Mkt size-26 products under development currently out of total 37 products identified for development)

✍️Transdermal patches (US$3 Bn Global Mkt size) : 8 products under development (Clinical trials to begin for the 1st product in FY21)
✍️Nasals (US$1.3 Bn Mkt size) : 1 approved + 4 under development (Filing will be done over the course of next 3 yrs)
#Aurobindopharma
#Growth

Biosimilars
✍️14 biosimilars are frm oncology, respiratory, rheumatology & ophthalmology therapy
✍️1st few launches are likely to be in oncology & ophthalmology molecule
✍️Likely to launch its 1st 2 biosimilars in Europe
✍️This biz has a high gestation period & involves high risk

✍️Aurobindo's biosimilars program is 2nd only to Biocon (28 biosimilars under development), in the indian pharma space)
✍️Expected incremental sales contribution would be in the range of ~30% to 80% vs FY20 topline. Based on 5% to 15% market share assumption (As per GS report)

Respiratory
✍️Developing 8 inhalers (market size of USD 10 bn)
✍️Patents seem to have already expired on most of the large MDI inhalers
✍️Expected incremental sales would be in the range of ~4% to 10% vs FY20 topline. Based on 5% to 15% market share assumption (As per GS report)

Depot Injectables
✍️Developing generic versions of 3 depot injectables (US$3.3 bn market size)
✍️Expected incremental sales would be in the range of 2% to 6% vs FY20 topline. Based on 5% to 15% market share assumption (As per GS report)

#AUROPHARMA

Pneumcoccal vaccines and other products
✍️Expected incremental sales from Pneumococcal vaccines and other complex generics (Peptides, Topicals, Transdermal Patches and Nasals) would be 12% to 34% vs FY20 topline. Based on 5% to 15% market share assumption (As per GS Report)

Q2FY21
✍️Sustained performance in the ARV category & the traction in US biz
✍️Anitbiotic APIs saw muted demand (50% exposure)
✍️Company filed for 24 ANDAs (10 Injectables)
✍️ANDAs unde review, tentatively approved, potentially cater to an addressable market size of ~$92 Bn

Injectables Portfolio
✍️Co's steady execution on its injectables portfolio has been improving the quality of biz in the US
✍️In Jun'20, 22% of Co's products marketed in the US were injectables compared to 12% in Jun'15
✍️20% of Co's revenue comes from injectables v/s 6% in 2015

✍️Generated 6% PAT margin frm its injectable biz vs corporate avg of 12%
✍️Injecatble biz RoE was ~55% vs corproate avg of 19%
✍️Co represents ~42% of US Injectable sales made by Indian listed cos
✍️Due to higher entry barriers, Injectable pricing has been more stable than orals

✍️Injectable & Inhaler Generics are comfortably outgrowing orals in US Generics mkt
✍️Co is having 5 commercialized Injectables formulations facilities & 5 Injectables API facilities
✍️Injectable generics has less than 4 mkt participants per product compared to 7 in Oral generics

Key development to watch
✍️Traction in Biosimilars
✍️Turnaround in the EU biz leads to improvement in the EBITDA margin
✍️Acquired biz of Apotex provides access to newer mkts (likely to breakeven in H2FY21)
✍️Turnaround in Apotex will lead to improvement in OPM of European biz!!

Valuation
✍️Consistently outgrown IND generic exporting peers over the past 5 yrs
✍️Likely to turn net debt free by FY22
✍️Co is currently trading at ~14x fwd PE (40% disc. vs Indian Generic Peers)

Source: GS Research, AR 2019-20
Disc: Not a buy/sell Reco. Just for study purpose