Thread by @ValueEducator

Annual Report No : 1
Highlights of #GlandPharma Annual Report FY 21

Pure play injectables player 💊💊

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Topics covered:
1.Overview of the company
2. Business segment
3. Management
4.Geographic segment
5.Therapeutic segment and Products.

6. New products
7.Fosun pharma
8.Manufacturing facilities
9. Sputnik V
10. New ventures
11. R&D
12. M&A

1. Overview of the company
Gland Pharma is a generic injectables focused company. It was established in 1978. Gland pharma is
involved in a variety of therapeutic segments such as anti-infectives, antineoplastics, ophthalmology.

They work to provide high quality generic injectables to meet the medical demand of the world.
They provide their products in geographies like the US, Canada, UK, Australia and India and have a
B2B and B2C model.

2. Business segment
Gland pharma’s business segments are divided into 2 divisions. A B2B model which has an IP led , a
tech transfer and a CMO model. The second division is the B2C model. Currently, around 97% of the business is from the B2B segment and about 3% is from the B2C

segment. In the IP led model, Gland develops the product using their R&D team and licenses it out to their Partners. Some of the company’s key partners are Fresenius Kabi, Sagent pharma, Apotex, Mylan and Sandoz. In the tech transfer model, the product is partially developed by

Gland Pharma. They provide stability tests and prepare exhibit batches. Technology transfer involves technical gap analysis with respect to manufacturing and analytical methods, analytical method transfers, verification of APIs and finished products, project specific validations,

execution of trial and submission batches, stability studies, preparation of documents for
dossier submission and project management. In the CMO model, the company is involved in the manufacture of already approved products.

In the B2C model, Gland supplies products to hospitals and clinics.

3. Management
MD & CEO, Srinivas Sadu holds a Bachelor’s Degree In Pharmacy from Gulbarga University, a Masters Degree In Science from Long Island University, New York and a

Masters Degree In Business Administration from University of Baltimore. He also holds a Postgraduate Certificate In Finance And Management from the London School of Business and Finance. He has previously worked at Natco Pharma Limited at Hyderabad.

He has over 21 years of experience in business operations and management. The CFO of the company is Ravi Mitra and has worked at Wockhardt and Ranbaxy. Mr KVGK Raju is the CTO of the firm

4. Geographic segments
Revenue percentage per market

The company is diversified internationally. Its core markets are The US, Canada, Europe and Australia.
Approximately 63% revenue comes from its core market. About 18% of the revenue is contributed by India.

The remaining is contributed by ROW, which are countries like China, Singapore, Israel, Saudi Arabia.

5. Therapeutic segment and products.

Therapeutic segment percentage of revenue and growth as of FY2020

Gland Pharma has a pretty diverse set of therapeutic areas like Anti-diabetic, Anti-malarials, Anti-infectives, Antineoplastics, Neurological and central nervous system, Blood related, Gastro-intestinal, Hormones, Ophthalmics, Respiratory, Vitamins, minerals, and nutrients,

Pain, neuro-muscular blocking agents and analgesics and others
The key products helping them achieve this growth include Micafungin Sodium, Ketorolac Tromethamine and Heparin Sodium. Among the key products, Enoxaparin Sodium was the biggest contributor to growth for the Rest

of the World Markets. In terms of products, Gland pharma was the pioneer in producing Heparin and Enoxaparin in India and still remains the biggest supplier of the products in the US market. These two products account for ~ 25% of their revenue as of FY20.

Top 5 products account for 40-45% of Gland Pharma’s sales where competition is still limited in Enoxaparin and Caspofungin.

6. New Products
Gland has also launched 47 product SKUs of 28 molecules during the year and the key launches for the year were Micafungin, Ziprasidone, Bivalirudin RTU and Olopatadine Ophthalmic (OTC). As of March 31, 2021, Gland along with their partners had 284 ANDA filings

in the US, of which 234 were approved and 50 were pending approval. 32 ANDAs are supported by in-house APIs as of FY21.

Gland is also looking to enter the rather tough US market of controlled substances such as narcotics. The sterile API technology has enabled gland to successfully develop betamethasone acetate, paliperidone palmitate, loteprednol etabonate, aripiprazole hydrate and

aripiprazole lauroxil. They have also developed non-infringing polymorphic forms of APIs, such as Tigecycline and Bortezomib, and novel processes for oncology APIs, such as cabazitaxel and pralatrexate.

7. Fosun pharmaceuticals
Fosun pharmaceuticals is the parent company and is also a promoter of Gland pharma with a 58% share. The company provides them with widened market access. Gland is trying to leverage its relationship with Fosun to try to enter into the rather tough

market of China. It has made 6 product filings with China as of 2020. Mr. Yiu Kwan Stanley Lau is the Chairman and Independent Director of Gland. He is also the Co-President of Shanghai Fosun Pharmaceutical (Group) Co. Ltd.

Gland is also planning to leverage its partnership with Fosun to build its CMO model pertaining to biosimilars.

8. Manufacturing facilities

As of FY2021 Gland had 8 manufacturing facilities of which 4 were finished formulation facilities including 2 sterile injectables, 1 dedicated penems facility and 1 dedicated oncology facility.

The 2 sterile injectables facilities are located in Dundigal and Pashamylaram. The penems facility is located in Pashamylaram as well and the oncology facility is located in Visakhapatnam. It also has 4 API facilities.

Their API facility helps them to backward integrate their business model.

9. Sputnik V

Gland had entered into an agreement with the Russian Direct Investment Fund (RDIF) to manufacture Sputnik V vaccine after which the facility was going to be used for biosimilars space.

During the year, The Company entered into an agreement to supply upto 252 million doses of RDIF’s Sputnik V COVID-19 vaccine. They have completed the tech transfer and submission batches and expect to receive the manufacturing license soon.

10. New ventures
Gland is focusing heavily on complex generics and biosimilars. Complex generics include long acting injectables, suspensions, hormones and peptides. Gland is eventually planning to work in the Biosimilar and Biologics CDMO segment.

Gland invested around ₹300 Cr in existing facilities and API facilities in FY22 and is planning to spend another ₹200 Cr in FY23. This will help them venture into complex generics and biosimilar segments.

11. Research and development
Gland claims to continue investing 3-4%of the revenue on R&D expenditure every year. In FY21, total R&D expenditure was ₹122 Cr, which was nearly 3.5% of their revenue from operations.

Including capital expenditure we see a rise in the R&D expenditure as a percentage of revenue. R&D expenditure for Q3 FY22 was ₹69.9 Cr which was nearly 6.6% of revenue from operations.

For the 9M period, upon excluding capital R&D expenditure, the R&D expenditure stands at 4.5% of revenue for the period.

12. Mergers and acquisitions

Gland plans to explore M&A opportunities to acquire products and technologies that will add to their capabilities and technical expertise, to strengthen their product and technology infrastructure such as long acting injectables,

steroidal hormonal products, suspensions, antineoplastics and nasal and inhalation products. The Company has entered into an agreement for the purchase of R&D and manufacturing facility of Vitane Biologics, a bio-pharmaceutical company located in Hyderabad.

Gland is also looking at niche API suppliers with complementary capabilities, especially in fermentation technology, corticosteroid APIs and hormonal APIs.