Claris Lifesciences limited Q4FY17 results revenue (Rs2,210mn) were in line with our estimates (Rs. 2170mn). The injectable business which has been divested to Baxter has been reported as discontinued operations as per accounting norms. Company also announced that the deal is on track for closure in August/September, a month later than the earlier deadline they had indicated. While the FIBP approval has come in the FTC approval is awaited. US FTC might require a product divesture as there is an overlap (between Baxter and Claris) and the combined entity would potentially control a more than fair share. The company has also indicated that post closure of...

Claris Lifesciences' (CLL) stated that its specialty injectable business (SIB), which was acquired by Baxter in December 2016, has been treated as discontinued operations during the quarter. On a consolidated basis, revenues for 3QFY17 stood at Rs 2,210mn,up 16% YoY and 14% QoQ. SIB reported revenues of Rs2,160mn, up 32%/13% YoY/QoQ, respectively. Growth continues to be driven by the high-margin US business which grew 12% QoQ and 82% YoY. US business reported record revenues of Rs1,420mn versus Rs1,270mn in 2QFY17.Sales in other...

The deal is attractively valued and comparable to its peers in the industry. An analysis of the Target Price: Rs480 deals in the injectable space suggests a median EV/EBITDA multiple of 19 times. At US$625mn, the business has been valued at 15.8 times EBITDA (last quarter's EBITDA annualised). In the Upside: 34% most recent quarter (2QFY17), the specialty injectable subsidiary reported EBITDA of Rs670mn. The most recent transactions in the space were of Fosun acquiring Gland Pharma and Japan- Vishal Manchanda...

Claris Lifesciences' (CLL) 2QFY17 revenues on a consolidated basis were down 2% YoY as Claris Otsuka pass-through sales were just Rs20mn compared to Rs4,400mn in the same period a year ago. Excluding Claris Otsuka pass-through sales, revenues for the quarter were up 22.5% compared to 2QFY16. On QoQ basis, sales were flat as strong growth in US sales during the quarter was offset by weak performance in emerging markets. Other operating income for the quarter was also lower at Rs0.89mn compared to Rs21.6mn in the previous quarter. Sales in the US during the quarter rose 23%/57% QoQ /YoY, respectively. US growth was driven by a mix of volume growth and product price hike. Sales in emerging markets during the quarter declined...

We had a meeting with the management of Claris Lifesciences limited (CLL) to know the recent developments which will have an impact on its business in the near to mid-term. Resolution of Form 483 observation recently issued by the USFDA remains the most immediate priority of the company and a response has been submitted. Company has further tightened its regulatory compliance and quality controls to ensure ongoing compliance. US business remains the growth driver and company is looking to grow@30% annually in the US for the next 3 years. 1. Update on Form 483 observations and ongoing regulatory compliance: CLL has submitted its response to the US Food and Drug Administration or USFDA with regard to recent Form 483...

Claris Lifesciences (CLL) is one of the largest pure play specialty generic injectable companies in India. It is one of the few large manufacturers of some complex injectable products like Diprivan and Iron Sucrose in the world. We initiate coverage on CLL with a Buy rating and a target price of Rs480 based on 14xFY18E EPS. Our Buy recommendation is based on: Proven execution and competitive strengths in the US: CLL has received approval for 16 abbreviated new drug applications or ANDAs in the US so far and out of the 16 it has launched 13. The blended market share of CLL in these 13 ANDAs is close to 25%, which speaks...