ALEMBIC PHARMACEUTICALS LIMITED – FUNDAMENTAL ANALYSIS

Alembic Pharma

INVESTMENT RATIONALE:

• Alembic Pharmaceuticals, a vertically integrated research and development Pharmaceuticals Company, Alembic’s state of the art research and manufacturing facilities are approved by regulatory authorities of many developed countries including the US FDA. It is one of the leaders in branded  generics in India.
• The company is implementing a Rs 1000 crore capex plan. The company has allocated a significant share of revenues to R&D to create a product pipeline for the US.
• It started focusing on the US market, in the past three years, the company has not only increased its research and development (R&D) efforts for the US market but has also acquired Orit, an oral solids and liquids manufacturing firm. Orit has seven approved and four pending ANDAs, along with a anufacturing facility.
• Alembic has a 200-product grid for the US market, up from 40 in three years and expects to launch 10-12 products for the US market every year. It is expected 50 per cent of its revenues to come from the US market by 2019-20.
• As of January 2018, the firm has cumulatively filed 119 ANDAs for the US, received 70 approvals and 49 are pending. The filing rate has picked up in the last two years. It filed 20 ANDAs in 2016-17 and aims to end 2017-18 with 25 ANDA filings.
• Alembic Pharmaceuticals announced that US health regulator has granted orphan drug designation to its associate company Rhizen Pharmaceuticals SA’s RP6530 used for treatment of cancer. A number of incentives are provided for an orphan-drug such as a 7-year marketing exclusivity, tax credit for clinical development costs, exemption/waiver of application (filing) fees and assistance from the USFDA office of Orphan Products Development during the development process.

VALUATIONS: