Glenmark Pharmaceuticals Ltd. share price target

Beyond gZetia . Budding niche product pipeline Ex US overall revenue growth was at 16% YoY and is expected to grow over 15% YoY going forward. The management has guided for better gross...

Q2FY18 revenues increased by 1.5% YoY lower than our forecast by 5.6%. EBITDA margin of 17.4% were lower than our estimates of 19.7%, mainly on the back of sales mix and higher expenses. PAT of Rs2bn, -8.6% YoY, was lower by 19.6%. For FY18, Glenmark has guided for the US business to have a run-rate of USD125mn+, however, with overall EBITDA margins of 21-22%. We are confident of Glenmark signing one out-licensing deal to help reduce debt. Key Highlights and Investment Rationale Pain continues for the US franchise...

ff FY18 Guidance: The Management expects sales (including gZetia) to grow by 6% YoY, while pegging EBITDA margin and gross margin at 21-22% and 68%, respectively. R&D; spend is pegged at 11-13% of sales. GNP plans to launch Ceylon Pharma's product (SalmaxgAdvair/...

Maintain BUY with a revised TP of Rs 1,000 (18x Sep-19E and Rs 135/sh for innovative pipeline). Glenmarks (GNP) 2QFY18 performance was slightly below expectations. The overall top-line grew 2% YoY to Rs 22.2bn. While a sequential decline in the US was expected on account of the loss of exclusivity of gZetia, US$113mn for the quarter was below our expectations. The EBITDA margin came in at 16%. There were one-time bonuses of Rs 1.1bn paid during the quarter, adjusted for which the margin would have been 21% and ~100bps ahead of our estimates. PAT was ~Rs 2bn, down ~9% YoY.

growth to pick up; high debt remains an overhang Net sales increased marginally by ~2% YoY (-5% QoQ) to INR22.2b (4% miss). EBITDA declined ~11% YoY to INR3.6b (2% beat), with the margin coming in at 16% (-230bp YoY, -740bp QoQ). Employee expenses included annual employee bonus of ~INR1.1b in 2Q. Adjusted for this, EBITDA came in below the previous quarter's level (note that 1QFY18 included Zetia sales with >80% GM). According to management, the improvement in margins...

The management gave a cautious outlook, as there is significant pricing pressure on the US base business owing to consolidation of players and increasing competition, which will continue for next two years. Although there are few more significant opportunities that will emerge in FY18 and FY19, we feel that a few overhangs will continue in the near term: 1) pricing pressure in the...

US generics comprise ~44% of total revenues and grew at a CAGR of ~17% in FY13-17. Total USFDA filings as on date are 187. So far, the company has received approval for 126. Out of the 61 pending ANDAs, ~28 are Para IV applications. Key therapies in the US, going forward, will be oncology dermatology and respiratory. The company expects to file 20-25 ANDAs and launch 10-15 ANDAs annually in the US. We expect US sales to remain subdued in FY17-20E to | 3162 (ex-gZetia CAGR ~3%), mainly due to higher base and pricing pressure in the US....

Glenmark Pharma (GPL) earnings came above our estimate. The company posted revenues of Rs 23.6bn with 20% YoY growth which was above our estimate of Rs 22.8bn. EBITDA margin, at 25.1%, was above our estimate of 22.1% due to favorable product mix . Adj.PAT increased at much higher...

US growth from new launches to offset base business price erosion US generics (~44% of total revenues) grew at ~15% CAGR over FY12-17. Total USFDA filings as on date are 185. So far, the company has received approval for 118. Out of 67 pending ANDAs, ~27 are Para IV applications. Key therapies in the US, going forward, will be oncology dermatology and respiratory. The company expects to file 20-25 ANDAs and launch 1015 ANDAs annually in the US. We expect US sales to remain subdued in FY17-19E to | 3284 (ex-gZetia CAGR ~5% in constant currency), mainly due to higher base and pricing pressure in the US....

Q1FY18 revenues increased by 20% YoY lower than our forecast by 7.8%. EBITDA margin of 24.4% were better than our estimates of 21.5%, mainly on the back of better gross margins. However, PAT of Rs3.3bn, +47% YoY, was a beat by 9.5%. For FY18, Glenmark has guided gZetia becoming a USD170-180mn franchise, however, remains confident for a 8-10% YoY growth in revenue in FY18E with EBITDA margins of 22%. For the US region, aims a flat or marginally better revenues in FY18E and signing atleast one out-licensing deal to help reduce debt. Key Highlights and Investment Rationale...