Lupin Ltd Q4 FY22 Earnings Conference Call Insights

Key highlights from Lupin Ltd (LUPIN) Q4 FY22 Earnings Concall

 

Q&A Highlights:

Pritesh Vora – Mission Street India – Analyst

• Total investment made in the biosimilar pipeline till now?

Ramesh Swaminathan — Executive Director, Global CFO

• A lot of LUPIN’s biosimilars is under partner programs.
  • The risk of development is borne by the financial partner.
• Total investment is of two kinds, which is minimal overall, INR250-300 crore together.
  • Investment on developmental pipeline
  • Investments for infrastructure.

Nilesh D Gupta – Managing Director

• Total biosimilar spend would be $15-20 million per annum. Additionally there is funding for the key programs.

 

Pritesh Vora – Mission Street India – Analyst

• When revenue starts coming in biosimilar pipeline, what’s the US and Rest of World revenue split.

Vinita Gupta – Chief Executive Officer

• Currently it’s all etanercept, and small.
• Going to be all ex-US currently.
• Next year, when pegfilgrastim is launched, a material shift will be seen to the US. Ranibizumab would also contribute.
• So more revenues will be seen in the US and partnered revenue ex-US.

 

Kunal Randeria – Edelweiss – Analyst

• Reasons for India business growth declining for past couple of quarters YonY.

Ramesh Swaminathan – Executive Director, Global CFO

• India business includes tender business, which was lumpy. Prescription business had 13.9% growth YonY.
• Not seeing any concerns on growth with this business.
• Excluding tender business, India business was good.

 

Kunal Randeria – Edelweiss – Analyst

• On US price erosion, when does LUPIN see companies starting to withdraw from molecules?

Vinita Gupta – Chief Executive Officer

• LUPIN is going to exit as is the other generic majors who see pressure on the industry.
• For the first time, put together an SOP for a very planned exit.

 

Saion Mukherjee – Nomura Securities – Analyst

• Color on LUPIN’s 10-12% growth.

Nilesh Gupta – Managing Director  

• The 10%, 12% is organic growth, which won’t happen in FY23, but growth will be sub 10% this year.
• Normalizing for in-licensed product, there’s higher growth.

 

Saion Mukherjee – Nomura Securities – Analyst

• What’s company’s M&A plans?

Nilesh D Gupta — Managing Director

• LUPIN is keen to acquire in India.
• When valuations go out of control of 7-8 year payback, LUPIN is not comfortable.

 

Krishnendu Saha – Quantum Asset – Analyst

• Number of products planned to be taken off the market in FY23 in US.

Vinita Gupta – Chief Executive Officer

• LUPIN is putting the list together but currently there are 3-4 that have been identified.
• 10 have been dropped so far from the current portfolio.

 

Kunal Dhamija – Clifford Chance – Analyst

• Status of Spiriva approval.

Vinita Gupta – Chief Executive Officer

• Got feedback from FDA with everything on the filing being fine.
• Might re-inspect the facility before approval.

 

Kunal Dhamija – Clifford Chance – Analyst

• FTS impact in FY22?

Ramesh Swaminathan – Executive Director, Global CFO

• Paid close to about $27 million during FY22.

 

Hitesh Mahida – HDFC Standard – Analyst

• With more than $2 billion in sales, why LUPIN is struggling with single digit margins. Ex of Spiriva and Suprep what margins is LUPIN looking at?

Vinita Gupta – Chief Executive Officer

• Struggle is with oral solids.
  • Pricing pressure.
  • Mounting costs.
• On inhalation (albuterol, Brovana and the like) and partnered products, profitability is decent.

 

Nithya Balasubramanian – Bernstein – Analyst

• What’s brand size of the target addressable market for Suprep? And for pegfilgrastim, the incremental cost related to the commercial infrastructure in FY23?

Vinita Gupta – Chief Executive Officer

• Suprep, $200 million.
• On pegfilgrastim, it’s marginal in FY23 and if it gets approved and launched, hope to be able to get enough product to the market paying for itself.