Thread by @ValueEducator

#GlandPharma Q3 FY22 concall highlights:

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1. Revenue - ₹1063 Cr (24% growth YoY).
2. EBITDA - ₹394 Cr (32% growth YoY). EBITDA margin stood at 36%
3. PAT - ₹273 Cr (34% growth YoY)

4. Almost 17-18% growth has come from increase in volumes and new launches have given 6% growth. So major growth has come from volumes and new launches so price changes do not affect them as much.

5. Completed ANDA filings for 4 complex injectables, 3 are hormonal products and 1 is a complex peptide. The addressable market is a total of $1 Billion for these 4 products.

6. Filed a total of 27 ANDAs for the 9 months this financial year. Also received 4 ANDA approvals during the quarter
R&D expenditure for the quarter ~₹70 Cr. For 9 months R&D expenditure stands at 4.5% of sales.

7. Strengthened presence in ROW markets by winning new tenders. ROW contributed to 19% of Q3 FY22 revenues. Key markets continue to remain MENA, LATAM and APAC.

8.Enoxaparin Sodium was the biggest contributor to growth among the key products.

9. Key markets(USA, Europe, Canada and Australia) accounted for 63% of revenues.

10. New variant of COVID affected offtake of core portfolio in the regulated markets.

11. Registered a 23% growth YoY in the US market. Key products driving the growth include Micafungin Sodium, Ketorolac Tromethamine and Heparin Sodium. Launched 6 new products during the quarter

12.The India market accounted for 18% of revenues. Sales for the domestic market stood at 6% of revenue and sales for export markets (primarily the US market) stood at 12% of revenue.

13. Ertapenem, which is a new launch in the US has shown strong demand from the end market.

14. They have a total of about ₹3285 of cash which they intend to use for capex and inorganic growth strategies

15.They are not interested in developing products in biosimilars themselves. They are looking to do development and manufacturing work for other biosimilar companies instead. Biosimilar revenue may kick in from Q1 FY23.

16. Gross margin is irrelevant to them because of their model. They do contract manufacturing which has 100% gross margin and also have licensing income which has 100% gross margin.

17. Various technology projects have varying gross margins. As the product mix changes, the gross margin varies.

18. EBITDA and PAT are better measures to gauge their performance.
19. Complex generics take a longer time to develop.

20. The 4 complex generics filings were supposed to be done last year, which they have done in this year.
21. They try not to delay filings and do it as soon as development work is done.

22. For peptide products, they either use third party APIs or they buy intermediates and produce the API themselves. But they are dependent on external parties for critical APIs. They will be looking for an acquisition to de-risk from that in the long term.

23. Biosimilars CDMO - They are looking at 2 types of businesses. First one is where the product is already generic and they do a tech transfer from the client and provide fill-finish service.

24. Second is the new drugs CDMO where they will be looking to provide services like cell line development, scale-up batches or pilot scale batches. So they will be looking to work more with companies who are developing new drugs and less with generic biosimilar companies.

25. They look at competition in the injectable space as a good thing for them because they get another partner who they can license their products to. Also a product portfolio in this space takes a long period of time to build, so the

new companies will take time to get to that stage.

26. Capex - Spent about ₹450Cr in 9 months and looking to spend another ₹100 Cr in the next quarter. So ₹550 Cr that was indicated for this financial year will be completely utilized.

It has been spent mostly on the vaccine facility in Pashamylaram.

27. Estimating about ₹300 Cr of capex in the next financial year. For further setting up the manufacturing lines in the facility. They are also adding capacity on the API side for more vertical integration.