Key highlights from Gufic Biosciences Limited (GUFICBIO) Q2 FY24 Earnings Concall
- New Product Launches and Approvals
- Launched new products like Dalbavancin and SeraSeal across divisions.
- The company received regulatory approvals for products in markets like Sri Lanka, Chile, Malaysia, Australia and Brazil.
- Expecting approvals for Immunocin-Alpha and dual-chamber bags with Meropenam in Q3.
- Antifungal drug targets INR500-600 crores existing market.
- HMG used in IVF is INR200-300 crores market and goal is to improve efficacy to gain share from recombinant FSH.
- New drug delivery systems being developed for pain management.
- R&D Achievements
- Gufic’s R&D team developed an anti-fungal product that eliminates cold-chain handling, making it accessible to remote healthcare centers in India.
- The company is working on recombinant alternatives for critical hormones to become self-reliant in supply.
- Concluded trials using Thymosin Alpha 1 to treat endometriosis and recurring implantation failure with positive results.
- Sales and Distribution Expansion
- Gufic is doing business with nearly 1000 hospitals under its Sparsh division and has presence in 12 states.
- The company has reached 60% of IVF centers in India through its Ferticare division.
- Gufic set up a neurology team targeting critical neurology segment for its brand Zarbot.
- Financial Performance
- Reported total revenue of INR215.2 crores in Q2 FY 2324, up from INR175.7 crores in Q2 FY 2323.
- PAT grew to INR23.2 crores in Q2 FY 2324 compared to INR20.2 crores in Q2 FY 2323.
- For 1H, total revenue rose to INR410.8 crores and profit after tax increased to INR43.8 crores.
- Sparsh Division Growth
- Sparsh currently generates around INR3 crores per month in revenue with 6-7 lakhs per capita per month.
- The company aims to reach INR10 lakhs per capita per month, which would justify adding more sales personnel.
- Gufic targets reaching INR6-7 crores per month in revenue from Sparsh by end of this financial year.
- Internationalization Strategy
- Gufic steadily builds presence across regulated and semi-regulated markets.
- Currently has 200 registered products in over 40 countries.
- The company has over 150 products in pipeline for registration in international markets.
- Takes targeted approach for product registration based on market attractiveness.
- Arisia Clinics Strategy
- Arisia clinics meant as training centers and knowledge hubs for doctors.
- Goal is to sell products like Botulinum Toxin, fillers and other aesthetics.
- Aims to expand doctor base beyond metros into tier 2 cities for wider reach.
- Will open more clinics as knowledge centers, not as profit centers.
- New Indore Facility
- Existing Navsari facility expected to hit full capacity by mid-2024.
- New facility needed to meet demand as injectables market expands in India.
- Gestation period required for approvals so facility needs to be ready in advance.
- Will help expand capacity and access new geographies with sophisticated products.
- Expect gradual ramp up over 2-3 years from 25% to 70% utilization.
- Growth Drivers and Comparison
- Domestic market driving more growth compared to exports.
- New products like Dydrogesterone and Polmacoxib contributing.
- Sparsh acquisition added inorganic growth domestically.
- Critical care and infertility segments saw expansion.
- Domestic growth higher than exports currently.
- Exports to regulated markets already at capacity.
- Domestic growth is 6-6.5X while exports is 4-4.5X.
- New facility needed to expand export capacity.
- Debt Repayment Plans
- 99 crores raised via preferential allotment to be used.
- 50% to repay term loans, 50% to reduce cash credit limits.
- Term loan repayment avoids prepayment charges.
- Reduced debt to reflect in March balance sheet.
- Working Capital Management
- Conscious trade-off between margins and working capital.
- Direct hospital billing avoids leakage despite long cycle.
- Optimizing inventory levels considering production cycles.
- Exploring ways to reduce contract manufacturing cycles.