Also Watch: Alkem Laboratories – A Detailed Analysis
Alkem Laboratories is India’s 5th Largest pharmaceutical company with more than 800 brands across 8 therapies segments.
Key facts about this company are as below:
In this article, we shall analyze this company from a medium to long term investment point of view.
In 1953, Mr. Samprada Singh started a medicine shop at Patna. After 6 years a pharma distribution co was found. He wanted to do the distribution for Aristo Labs, hence he incorporated Alkem Laboratories in 1973 with younger brother Mr. Basudeo Singh.
Business Model of Alkem Laboratories
Alkem owns 10 Brands with annual sales of more than Rs 1 billion (Rs 100 cr+). The details of the same are below:
The key point to note is that Alkem key segments namely AI, GI, VNS, Pain/Analgesia has been growing faster than the overall IPM.
Alkem has generated a CAGR of 15% in the past 5 years in the domestic market.
If we compare year wise growth rate also then it has beaten IPM CAGR handsomely as evident from the chart below:
Domestic Mix: Alkem portfolio
• Within India business, chronic therapies have been preferred over acute for better growth and profitability.
• Covid has driven the adoption of e-pharmacies. E-pharmacies (Reliance-Netmeds, Amazon) may dent the ability of companies to take price hikes in chronic portfolios
• We expect the profitability of Acute therapies to sustain
In the US, the off-patent market is stated to grow:
However, the cost of filing ANDA has also risen significantly in the past 5 years:
While sales per marketed ANDA dwindles for most of its peer, Alkem has generated sustainable and growing revenue per marketed ANDA over the past 5 years, indicating a strong market presence in its key US market.
ALKEM: USFDA Inspection Report
Cash Flow Analysis
Key Investment Risks
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