Why did #LaurusLabs bought a significant minority stake (26.62%) in a cell and gene therapy startup (ImmunoACT)?
A short thread 🧵👇🏽⤵️
The entire motive behind acquisitions can be understood by understanding what #LaurusLabs is trying to do with its Biologics vertical.
A snippet of this can be found in interviews of Dr.Chava at the time of acquisition of Richore.
Biologics is a high gestation and high investment area within the Pharma industry
Typical development times range in many years and take about 5+ years on average to really scale up and transition to commercial production
This also translate into high barriers of entry
By acquiring Richcore, Laurus circumvented all of that and got itself the technical skills required to build a foundation for a Biologics business.
Laurus's strength has always been scale and research which ultimately helps it in becoming a lowest cost supplier in the areas it operates.
They used the same business philosophy to transition from a CRO to a ARV API supplier in its early days.
Whatever Laurus learnt while doing CRO functions for other pharma companies, it used that knowledge to perfect the process to make ARV APIs.
Within few years of supplying ARV APIs, Laurus became a lowest cost producer and ultimately dominated market share in that space.
That same philosophy is being repeated to set up its Biologics arm.
Here is a snippet from the Dec'20 concall on Richcore acquisition.
As you can see from the earlier snippet, instead of going after the highly competitive market of Biosimilars, Laurus opted to scale up capabilities of Richcore and enable it to commercialize its already cost competitive process of making recombinant proteins.
Recombinant proteins market today is not as competitive as biosimilars and within a few years of perfecting the process to make them, Laurus would soon repeat what it did with ARV APIs - making the lowest cost product in the world.
All of that brings us to why - ImmunoACT?
A company that has nothing to do with recombinant proteins but is working on CAR-T and cell therapies.
The answer is technical expertise.
ImmunoACT has the technical knowledge that can help Laurus add another offering to its Biologics arm.
I believe eventually, this minority stake today will become an outright majority acquisition within next 2-3 years .
ImmunoACT is also not just random company, its a IIT Bombay incubated start up that has some of the leading experts on its board and is run by highly talented faculty of the institute.
The advisors and scientific board at ImmunoACT
Meet Prof. Rahul Purwar, the founder of ImmunoACT
As #LaurusBio matures, so will the various product and service offerings of the company, and its my prediction that most of these will come via the way of acquisitions or acqui-hires.
What we are witnessing today, is the birth and foundational set up of what may eventually become a primer biologics business originating out of India within the next decade.
Here is an old article on ImmunoACT, if you want to read.
In this thread we will talk about Portfolio Construction
1⃣ Factors that determine how a Portfolio should be constructed
2⃣ Different types of PF construction methodologies
3⃣ Why Portfolio Principles matter?
Lets dive right in.
Before you start picking stocks and sectors to invest in, you should be asking yourself a few very important questions.
1⃣ What is my End Goal from Investing?
2⃣ What is my Risk Profile?
3⃣ What is my Time Horizon?
"quarter-percentage point increase" less than what was being priced in, the first to rise will be US Growth/Tech Stocks, our markets tomorrow may be bullish as well
May remain choppy, but the moves should get less volatile both on up and downside
⭐️The Good
1⃣ Debt further reduced to ₹976cr
2⃣ Divestment of Subsidiary of ₹580cr
3⃣ Sold receivables of ₹2,159cr & total completed inventory of ₹983cr
👎The Bad
1⃣ New Sales were only of ₹184cr & Gross Collections of ₹292cr
1/5
Now I do not know why there was a slowdown in New Sales, they haven't provided any information in the Earnings Presentation
If they are finding it hard to sell inventory then its an issue & a systematic risk
Having said that, these numbers do not mean much on their own
2/5
Company is being valued on the numbers of Embassy without investors getting any insight into what Embassy's performance was like this Qtr
This should get resolved Q1FY23 onwards post merger with Embassy is completed
Hard to value #IBREAL on its own result in such scenario
3/5