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.