Categories Health Care, Research Summary

Panacea Biotec Limited: Making India Healthier

Panacea Biotec Limited is an Indian pharmaceutical company that is engaged in research, development, and manufacturing of pharmaceuticals, vaccines, and natural products. The company was founded in 1984 and is headquartered in New Delhi, India. 

Stock Data
Price Performance
Last 5 Days+4.17%
Last 12 Months-28.13%

*As of 18.04.2023

The demand for vaccines is quite robust in India. With very few suppliers in the market, this creates an opportunity for India’s leading vaccine developer – Panacea Biotec Limited. 

The company operates under two reported segments:

  • Vaccine Business: Panacea Biotec is the sixth largest vaccine manufacturing company in India. Further, it is one of the leading players in key pediatric vaccines in the nation. Quite interestingly, the company has played a pivotal role in eradication of polio by supplying billions of doses of WHO prequalified oral polio vaccine over the last two decades. It has a robust vaccine portfolio with high market potential built upon a strong R&D foundation. 
  • Pharmaceutical Formulation Business: Panacea is the tenth largest pharma company in India. In this segment, the company deals with Organ Transplantation, Oncology and Diabetes management through 4 SBUs – Transplant & Immunology, Oncotrust, Diacar, Alpha and Procare. The Key Products are Mycept, PanGraf, Alphadol, Toff Plus, Glizid-M, Nimulid, PacliAll which are sold in India and also exported to 30+ countries. The formulation business has 70 brands with 11 brands among Top 3 in the represented market as of March 31st 2021. The group consists of a specialist sales force of 730+ personnel and over 2,200+ distributors. 

Key Strengths:

  • Debt Reduction: Panacea has a core vaccine business and a domestic and international formulation business. It has had a troubled balance sheet for many years and this has arrested their growth ambitions. Interest costs have been very high over the years. In February, they sold their domestic formulation business to Mankind for about INR 1900 Crores which helped them get cash equivalent of INR1900 Crores for one of their businesses, while the total EV at that time was INR 1900 Crores. They paid back their debt, and currently have INR 583 Crores cash on books. They will invest the rest of the money in R&D and future capacity expansions which will help them retain their position in the market. 
  • Robust product pipeline of promising niche products to fuel long-term growth: They have been one of the pioneers of India’s vaccine industry and have registered vaccines in 16+ countries. Their pentavalent vaccine is WHO approved and is supplied to WHO and in the private market. They also have a contract with Sputnik, to develop the “Sputnik -V” vaccine. Among other projects, they are likely to launch a vaccine for dengue over the next couple of years, which as you can imagine has a massive addressable market.
  • Established R&D capabilities and extensive distribution network: Panacea is Amongst Top 50 Innovators In India. As of March 31, 2022, Panacea Biotec Group has led over 485 patent applications in over 65 countries including India, which include patent applications, pending grant and patent applications which were prosecuted. As of March 31, 2022, the Group has been granted over 462 patents globally out of which 36 are active. Panacea Biotec Group has led 518 trademark applications for registrations. Further, the Group has 95 registered copyrights as on March 31, 2022.

Future Growth Strategy:

Vaccine Business:

Short to medium term:

  1. Scaling up vaccine sales in the private market in India including through launch of new vaccines.
  2. Increasing participation in institutional vaccine business with UNICEF, PAHO, etc.
  3. Expediting development of tetravalent Dengue vaccine DengiAll®, Pneumococcal Polysaccharide Conjugate Vaccine NucoVac®11 and other vaccines and launch thereof in India and Institutional markets.
  4. Expanding manufacturing capacities to meet the future growing demand of vaccines.

Long term:

  1. Scale up of sales of DengiAll® vaccine and NucoVac® 11 vaccine in the private market in India and launch of these vaccines in developing countries.
  2. Supply of hexavalent vaccine to UNICEF, PAHO and other international markets.

2. Pharma Business:

Short to Medium Term:

  1. Growth in exports of pharmaceutical formulations to emerging markets in Latin America and the Middle east.
  2. Scaling up of existing niche generic businesses in the USA.
  3. Launch of Paclitaxel protein bound particles for injectable suspension, Cyclosporine and other products, which are currently under approval, in the USA.
  4. Filing more ANDAs / dossiers in USA, Europe and other emerging markets.

Long term:

  1. Launch of more products in the US, EU and other emerging markets.
  2. Scaling up of new business opportunities in the domestic market.

Financial Results:

Panacea Biotec Limited’s revenue in Q3FY23 fell 26% to ₹ 11,520 lakhs. Consolidated Profit After Tax came at ₹ 1,937 lakhs in Q3FY23. In this quarter’s results, the reports suggested that the firm has reported decreased revenues and the reason for the increased profitability is the income received from Exceptional Items.

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