IPOs and Catalysts/Events, Global Equity Research Ltd

Arun George

IPOs and Catalysts/Events

Uncompromised, Independent, Conflict-Free Research

Global Equity Research Ltd

Global Equity Research was started in 2017 by a group of experienced research professionals. It was founded on a passionate belief in the importance and the need for uncompromised, independent, conflict-free research. We aim to provide differentiated and actionable primary and bottom up fundamental research.

Equity Capital Markets

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<a href="https://www.smartkarma.com/entities/mankind-pharma-ltd" target="_blank" data-smartkarma-citation="entities:36389:1" rel="noopener">Mankind Pharma (6596876Z IN)</a>, a pharmaceutical company, is seeking to raise up to Rs45 billion (US$550 million) in April, according to press reports.</li>
<li>Mankind Pharma is India’s fourth-largest pharmaceutical company in terms of domestic sales and second-largest in terms of sales volume in FY22, according to IQVIA.</li>
<li>The key elements of the bull case rest on a track record of growing brands and market share,  accelerating growth rates, and profitability with margins in a relatively tight range.</li>
</ul>



Mankind Pharma (6596876Z IN), a pharmaceutical company, is seeking to raise up to Rs45 billion (US$550 million) in April, according to press reports.
Mankind Pharma is India’s fourth-largest pharmaceutical company in terms of domestic sales and second-largest in terms of sales volume in FY22, according to IQVIA.
The key elements of the bull case rest on a track record of growing brands and market share,  accelerating growth rates, and profitability with margins in a relatively tight range.


Global Healthcare Analyst

Tina Banerjee

Equity Bottom-Up

Zydus Lifesciences Ltd / Equity Bottom-Up

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<a href="https://www.smartkarma.com/entities/zydus-lifesciences-ltd" target="_blank" data-smartkarma-citation="entities:12914:1" rel="noopener">Zydus Lifesciences Ltd (ZYDUSLIF IN)</a> reported total revenue of INR43.6B, up by 20% YoY and 6% QoQ, in Q3FY23. Key markets, India and the U.S. continued to deliver robust performance.</li>
<li>U.S. business is on track to register QoQ growth in near-term, with the launches of new products. Zydus plans to launch 2–3 transdermal products in U.S. in FY24.</li>
<li>For its India business, the company aims to outperform the industry growth sustainably in the medium to long term. Lipaglyn is expected to be among top 25 products of India.</li>
</ul>



Zydus Lifesciences Ltd (ZYDUSLIF IN) reported total revenue of INR43.6B, up by 20% YoY and 6% QoQ, in Q3FY23. Key markets, India and the U.S. continued to deliver robust performance.
U.S. business is on track to register QoQ growth in near-term, with the launches of new products. Zydus plans to launch 2–3 transdermal products in U.S. in FY24.
For its India business, the company aims to outperform the industry growth sustainably in the medium to long term. Lipaglyn is expected to be among top 25 products of India.


Zydus Lifesciences (ZYDUSLIF IN): Strong India and US Momentum to Improve Margin and Drive Growth

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<li>In Q3 FY23, <a href="https://www.smartkarma.com/entities/aurobindo-pharma-ltd" target="_blank" data-smartkarma-citation="entities:19974:1" rel="noopener">Aurobindo Pharma (ARBP IN)</a> recorded net profit of INR4.9B (~$60 million), down 19% YoY. Consensus expected the company to report net profit of INR5.2B during the quarter.</li>
<li>Net profit was negatively impacted by 51% YoY increase in R&amp;D expenditure due to biosimilar pipeline progress. R&amp;D expenses are expected to remain high over the next 6–7 quarters.</li>
<li>The company had negative free cash flow of $82M. With lack of any immediate catalyst or shareholders’ reward, we don’t expect multiple expansion for Aurobindo Pharma at least in near-term.</li>
</ul>


In Q3 FY23, Aurobindo Pharma (ARBP IN) recorded net profit of INR4.9B (~$60 million), down 19% YoY. Consensus expected the company to report net profit of INR5.2B during the quarter.
Net profit was negatively impacted by 51% YoY increase in R&amp;D expenditure due to biosimilar pipeline progress. R&amp;D expenses are expected to remain high over the next 6–7 quarters.
The company had negative free cash flow of $82M. With lack of any immediate catalyst or shareholders’ reward, we don’t expect multiple expansion for Aurobindo Pharma at least in near-term.


Aurobindo Pharma (ARBP IN): Q3 Net Profit Dropped; R&D Cost To Remain Elevated in Near-Term

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<a href="https://www.smartkarma.com/entities/mayne-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:757:1" rel="noopener">Mayne Pharma (MYX AU)</a> reported triple-digit revenue growth in branded products division in H1FY23, driven by oral contraceptive Nexstellis, which contributes ~80% of segment sales.</li>
<li>The company had an encouraging start to H2FY23. Both Nexstellis and dermatology are expected to exit FY23 with a positive run-rate contribution.</li>
<li>The company has decided to cancel the previously proposed pro rata capital return and intends to use its cash in a better and productive way.</li>
</ul>



Mayne Pharma (MYX AU) reported triple-digit revenue growth in branded products division in H1FY23, driven by oral contraceptive Nexstellis, which contributes ~80% of segment sales.
The company had an encouraging start to H2FY23. Both Nexstellis and dermatology are expected to exit FY23 with a positive run-rate contribution.
The company has decided to cancel the previously proposed pro rata capital return and intends to use its cash in a better and productive way.


Mayne Pharma (MYX AU): H1 Result- Branded Products on Strong Momentum; Reset for Profitable Growth

Event-Driven

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<a href="https://www.smartkarma.com/entities/dr-reddy-s-laboratories-ltd" target="_blank" data-smartkarma-citation="entities:16406:1" rel="noopener">Dr. Reddy's Laboratories (DRRD IN)</a> entered into a definitive agreement to acquire the U.S. retail generic prescription product portfolio of <a href="https://www.smartkarma.com/entities/mayne-pharma-group-ltd" target="_blank" data-smartkarma-citation="entities:757:1" rel="noopener">Mayne Pharma (MYX AU)</a> for $105M.</li>
<li>The deal will add approximately 85 approved generic products and four pipeline products. For the fiscal year ending June 30, 2022, this portfolio generated revenue of $111M.</li>
<li>Considering the revenue potential, the acquisition price seems to be reasonable. Being a high margin and limited competition portfolio, the acquisition will be earnings accretive for Dr. Reddy’s.</li>
</ul>



Dr. Reddy's Laboratories (DRRD IN) entered into a definitive agreement to acquire the U.S. retail generic prescription product portfolio of Mayne Pharma (MYX AU) for $105M.
The deal will add approximately 85 approved generic products and four pipeline products. For the fiscal year ending June 30, 2022, this portfolio generated revenue of $111M.
Considering the revenue potential, the acquisition price seems to be reasonable. Being a high margin and limited competition portfolio, the acquisition will be earnings accretive for Dr. Reddy’s.


Dr. Reddy's Laboratories (DRRD IN): New Acquisition to Bolster US Generic Product Portfolio

India

Dr. Reddy's Laboratories Limited provides a complete range of pharmaceutical services. The Company manufactures bulk drugs and formulations including verapamil and cephalexin. The Company also manufactures and exports molecules such as norfloxacin, ciprofloxacin, and varieties of semi-synthetic penicillin. The Company markets its products in India and around the world.

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Dr. Reddy's Laboratories (DRRD IN)

Mankind Pharma IPO: The Bull Case

The key elements of the bull case rest on a track record of growing brands and market share, accelerating growth rates, and profitability with...

Arun George

Zydus Lifesciences (ZYDUSLIF IN): Strong India and US Momentum to Improve Margin and Drive Growth

Zydus’ key markets of US and India are on double-digit growth path. Riding on new launches and strong performance of base portfolio, the company is...

Tina Banerjee

Aurobindo Pharma (ARBP IN): Q3 Net Profit Dropped; R&D Cost To Remain Elevated in Near-Term

In Q3, Aurobindo Pharma reported 19% YoY decline in net profit and missed consensus expectations due to 51% surge in R&D cost, which is expected to...

Tina Banerjee

Mayne Pharma (MYX AU): H1 Result- Branded Products on Strong Momentum; Reset for Profitable Growth

Mayne reported triple-digit growth in branded products division, driven by Nexstellis. The company had an encouraging start to H2, with improving...

Tina Banerjee

Dr. Reddy's Laboratories (DRRD IN): New Acquisition to Bolster US Generic Product Portfolio

Dr. Reddy's is acquiring the US generic prescription product portfolio of Mayne Pharma for upfront cash consideration of up to $90M. The acquired...

Tina Banerjee

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