Is Shilpa Medicare a Cancer Giant – Important Notes from 2020 Annual Report

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Written By: JST Investments

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Shilpa Medicare Logo

Source: Stockinforce

Important Takeaways from Shilpa Medicare 2020 AR

  • Amongst the leading APIs and Formulations manufacturers with strong capabilities in the therapeutic area of oncology and non-oncology.
  • Supplies 30+ oncology APIs to the USA, Europe, Japan, etc (10yrs+ experience in regulated markets).
  • Aims to commercialize 3-4 molecules per year.
  • In the process of debottlenecking oncology production blocks by enhancing capacity by 40-70%.
  • Sale of non-oncology APIs: Ambroxol (Mucolytic agent) in Europe and Tranexamic Acid and Ursodeoxycholic acid in India.
  • Formulations: 16 injectable dosage forms, 19 oral solid dosage forms under SML & 13 Formulations under SML’s wholly-owned subsidiary Shilpa Therapeutics Private Limited.

 

How Big is Cancer?

Cancer is the second leading cause of death.

According to a WHO, report cancer caused an estimated 9.6 million deaths in 2018. 

Globally, about 1 in 6 deaths is due to cancer. Approximately 70% of deaths from cancer occur in low- and middle-income countries.

Shilpa Medicare Plant

Source: Moneycontrol

Of the 15,267 assets across all phases of development, about 34% are oncolytic, up from 30% in 2013. 

  • The company has forayed into Biologics, Oral Dissolving Films, and Transdermal Patches.
  • While stepping into FY2021, acquired FTF Pharma, an integrated drug development company.
  • Biosimilars: 4 of the top 15 products in the pipeline.
  • A combo line at the upcoming facility in Bangalore for Oral.
  • Disintegrating Films and Transdermal patches will be commissioned soon.
  • 265+ scientists | 357 patents filed with 47 granted.
  • The formulation product pipeline consists of 61 with 38 approvals.
  • Highlights of the year gone by one ANDA & 6 FTF in pipeline | Good CashFlow Conversion.
  • Gross block up 13% YoY to 875crs; CWIP: 482crs; Intangible Assets under development: 182 Crs.
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Shilpa Medicare ANDA Filings
  • Form 483 with 15 observations at the Jadcherla, Telangana formulation plant.
  • Shilpa Medicare oncology APIs segment has delivered as per plan and will continue to progress based on our attractive pipeline and diversified base of intermediates.
  • 1st company in India to launch ODF and among the first few in Nano.
Shilpa Medicare Strategy
  • Capacity: 120m tablets & capsules | 15m Liquid & Lyophilised Injections | 2m Prefilled Syringes | 350 tonnes API
  • Biologics Capabilities of Shilpa Medicare: Need to monitor.
  • Interesting Development
    • Launched green tea films – a revolutionary technology 
    • Formed a new subsidiary to manufacture “Recombinant Human Albumin (RHS), recombinant peptides, analogs, and polymers” 

 

API Manufacturing: What is the opportunity size for India and Shilpa Medicare?

India is a source of about 20% of the world’s generic drugs supply.

Drug and pharma exports from India rose 11.7% on year to touch $19.15 billion in the 11 months to February 2020.

The global API market is expected to reach US$ 245 billion (6.1% CAGR) by 2024.

  • Regulatory Filings Summary: Progressing towards more complex generics | Product Development & License fees: 135crs.
Shilpa Medicare Revenue Medicare
Geographical Revenue breakup
  • On the Biologics front: Shilpa Medicare is in an advanced stage for setting up of a world-class biologics manufacturing facility for Monoclonal antibodies and biologics in Belur, Dharwad.
  • The facility consists of two production lines for Drug Substance. The first, second lines are currently in qualification and expected to be completed by 2020.
  • Shilpa Medicare is forging ahead with clinical trials on 1 no MAb, 1 nos fusion protein, and 1 nos NBE during the course of the coming financial year, while 1 other is expected to complete preclinical studies. (combined market size ~$20 billion.)
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Shilpa Medicare Products Portfolio

Image: Shilpa Medicare Products Portfolio | Source: Stockinforce

  • 2 more are expected to be added in the next financial year to the clinical trial pipeline, with market size of about $12 billion.
  • Complex Capital Structure: A common theme in pharmaceutical companies.
  • 1754 permanent employees | median increase of 9.53% YoY
  • Constant promoter Shareholding: 53.80%

Also Watch: Shilpa Medicare Diversification Plans

Read more Company Analysis here.


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JST Investments
JST Investments is a Mumbai-based investment firm that believes in long-term wealth creation. It's a brainchild of Aditya Kondawar, Aditya Shah, and Anish Moonka.
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