#Syngene - Thread⚡️
An integrated service provider offering end-to-end drug discovery, development, and manufacturing services on a single platform.
25+ years of unparalleled experience
@unseenvalue @AvadhMaheshwar2 @caniravkaria @Jitendra_stock @saketreddy @itsTarH
An integrated service provider offering end-to-end drug discovery, development, and manufacturing services on a single platform.
25+ years of unparalleled experience
@unseenvalue @AvadhMaheshwar2 @caniravkaria @Jitendra_stock @saketreddy @itsTarH
(2/n)
Syngene, a subsidiary of Biocon Ltd, was established in 1993 as India’s first Contract Research Organization.
CRO is a company that provides support to the pharma industry in the form of research services outsourced on a contract basis. CROs are designed to reduce costs.
Syngene, a subsidiary of Biocon Ltd, was established in 1993 as India’s first Contract Research Organization.
CRO is a company that provides support to the pharma industry in the form of research services outsourced on a contract basis. CROs are designed to reduce costs.
(3/n)
Well-positioned to monetize a larger pie of the huge CRO market given its integrated capabilities, competitive strength, and cost advantage built over 20 years
>Moving from CRO to CRAMS(Contract research and manufacturing services) with commercial manufacturing
Journey👇🏼
Well-positioned to monetize a larger pie of the huge CRO market given its integrated capabilities, competitive strength, and cost advantage built over 20 years
>Moving from CRO to CRAMS(Contract research and manufacturing services) with commercial manufacturing
Journey👇🏼
(4/n)
Key Stats:
2 Mn sq. ft. of World-class infrastructure, qualified to meet international standards
400+ active clients
4700+ talented team of scientists including ~490 PhDs
8 collaborations with top 10 pharma companies
Rs.35,634 Mn Capex Investment as of March'21
Key Stats:
2 Mn sq. ft. of World-class infrastructure, qualified to meet international standards
400+ active clients
4700+ talented team of scientists including ~490 PhDs
8 collaborations with top 10 pharma companies
Rs.35,634 Mn Capex Investment as of March'21
(5/n)
Divisions:
Discovery: Conducts early-stage research, from target identification to delivery of drug candidates for further development
Development: Engaged in activities from pre-clinical to clinical trials, including drug substance and drug product development
Divisions:
Discovery: Conducts early-stage research, from target identification to delivery of drug candidates for further development
Development: Engaged in activities from pre-clinical to clinical trials, including drug substance and drug product development
(6/n)
Manufacturing: Manufacturing services for small and large molecules
Dedicated R&D Centers: Offer dedicated multi-disciplinary scientific teams, support personnel, and ringfenced infrastructure as per client specifications to support the client’s R&D requirements 👇🏼
Manufacturing: Manufacturing services for small and large molecules
Dedicated R&D Centers: Offer dedicated multi-disciplinary scientific teams, support personnel, and ringfenced infrastructure as per client specifications to support the client’s R&D requirements 👇🏼
(7/n)
FY21 Highlights:
>Total CAPEX spend in FY21:$63Mn
>US$10mn for Mangalore API plant, US$25mn for Discovery services, US$10mn for Biologics, US$15mn for dedicated services
>It has received an extension of contract from its largest customer, BMS (~30-35% of sales) up to 2030
FY21 Highlights:
>Total CAPEX spend in FY21:$63Mn
>US$10mn for Mangalore API plant, US$25mn for Discovery services, US$10mn for Biologics, US$15mn for dedicated services
>It has received an extension of contract from its largest customer, BMS (~30-35% of sales) up to 2030
(8/n)
>Despite the tough FY21, Syngene has been able to increase its clients by 40+ (Total 402)
>EBITDA margin from operations increased by 220 basis points from 28.4% in FY20 to 30.6% in FY21
>Started manufacturing of small molecule API at Mangalore facility for some clients
>Despite the tough FY21, Syngene has been able to increase its clients by 40+ (Total 402)
>EBITDA margin from operations increased by 220 basis points from 28.4% in FY20 to 30.6% in FY21
>Started manufacturing of small molecule API at Mangalore facility for some clients
(9/n) Favorable trends:
Increasing R&D investment: By 2026, R&D spending by the pharmaceutical industry is estimated to reach over USD 230 Bn. This continued growth in R&D investments will drive the growth of the CRO market
Focus on core competencies by pharmaceutical companies
Increasing R&D investment: By 2026, R&D spending by the pharmaceutical industry is estimated to reach over USD 230 Bn. This continued growth in R&D investments will drive the growth of the CRO market
Focus on core competencies by pharmaceutical companies
(10/n)
>Increasing number of small biotech companies: Emerging and virtual biotechnology companies often lack the internal infrastructure to run their own research
>Focus on cost optimization by biopharmaceuticals
>Increased complexity in drug development
>Increasing number of small biotech companies: Emerging and virtual biotechnology companies often lack the internal infrastructure to run their own research
>Focus on cost optimization by biopharmaceuticals
>Increased complexity in drug development
(11/n)
Generic medicines continue to play an important role in increasing patient access to affordable healthcare+increasing demand for biological therapies, growing focus on specialty medicines, and advancements in cell and gene therapies are fueling the growth of CMO market
Generic medicines continue to play an important role in increasing patient access to affordable healthcare+increasing demand for biological therapies, growing focus on specialty medicines, and advancements in cell and gene therapies are fueling the growth of CMO market
(12/n)
Clients:
Syngene's experience spans multiple industry segments and partnerships with global leaders across the world.
>Increase in average revenue from largest clients + Increase in number of services offered to clients ✅
Clients:
Syngene's experience spans multiple industry segments and partnerships with global leaders across the world.
>Increase in average revenue from largest clients + Increase in number of services offered to clients ✅
(13/n)
Revenue Breakup:
Discovery Services - 35%
Development and Manufacturing Services - 33%
Dedicated R&D Centers -32%
Client Engagement Points: Since the company offers end-to-end drug discovery, it has multiple entry points in the drug lifecycle.
Revenue Breakup:
Discovery Services - 35%
Development and Manufacturing Services - 33%
Dedicated R&D Centers -32%
Client Engagement Points: Since the company offers end-to-end drug discovery, it has multiple entry points in the drug lifecycle.
(14/n)
Biologics facility:
Enhanced Mammalian capability by addition of 2,000L reactor
Added 500L microbial facility to enhance offering and cater to wide variety of drugs ranging from anti-cancer to hormonal disorder
Biologics facility:
Enhanced Mammalian capability by addition of 2,000L reactor
Added 500L microbial facility to enhance offering and cater to wide variety of drugs ranging from anti-cancer to hormonal disorder
(15/n)
Guidance-FY22
EBITDA margin to be ~30%
Mid-teen growth in revenue from operations
The focus will be on investment-led growth with expansion in infrastructure, staff headcount, and capability additions across core businesses and ramp-up of sales presence in key markets
Guidance-FY22
EBITDA margin to be ~30%
Mid-teen growth in revenue from operations
The focus will be on investment-led growth with expansion in infrastructure, staff headcount, and capability additions across core businesses and ramp-up of sales presence in key markets
(16/n)
Elite client additions like Amgen, Zoetis, Herbalife, GSK, etc, and multiple year extension of BMS, Baxter contracts, the company remains well poised to capture opportunities in the global CRO space.
Company has announced a capex of Rs7.5-9bn for FY22E.
Elite client additions like Amgen, Zoetis, Herbalife, GSK, etc, and multiple year extension of BMS, Baxter contracts, the company remains well poised to capture opportunities in the global CRO space.
Company has announced a capex of Rs7.5-9bn for FY22E.
(17/n)
Mangalore API Plant: Large scale operations once the USFDA inspection and approval comes through
Impact on near-term profitability as investments in the CMO segment are characterized by longer gestation periods compared to the faster scale up in CRO business.
Mangalore API Plant: Large scale operations once the USFDA inspection and approval comes through
Impact on near-term profitability as investments in the CMO segment are characterized by longer gestation periods compared to the faster scale up in CRO business.
(18/n)
Favourable trends, advanatge of quality workforce at low cost, high margin business, and given that innovator CMO space is highly complementary to the CRO space + Syngene’s track record of working with innovators positions the company for scaling up the business and GROW!
Favourable trends, advanatge of quality workforce at low cost, high margin business, and given that innovator CMO space is highly complementary to the CRO space + Syngene’s track record of working with innovators positions the company for scaling up the business and GROW!
(19/n)
Source: Investor Presentation, Screener, Research Reports, FY21 Annual Report, @soicfinance Syngene Stock Analysis >
Source: Investor Presentation, Screener, Research Reports, FY21 Annual Report, @soicfinance Syngene Stock Analysis >
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