BackGland Pharma management on Covid vaccine opportunity
Gland Pharma's management is also focused on the manufacture of Sputik light as well, Motilal Oswal said in a note
PremiumGland Pharma has completed technical batches for the first dose of the Sputnik covid vaccine and is working on improving the yield of the second dose and the management is also focused on the manufacture of Sputik light as well, its MD and CEO, Srinivas Sadu said as part of the CEO Track at Annual Global Investor Conference (AGIC) CY21 hosted by Motilal Oswal.
The brokerage in a note said that Gland Pharma is already manufacturing exhibit batches of the single dose Sputnik Light. While commercialization of other vaccines has reduced the opportunity to some extent in India, the same remains intact in other emerging countries. Booster dose requirements are likely to make the vaccine an ongoing opportunity, rather than just a one-time affair. The contract is to supply to RDIF, and a diminishing India opportunity has a little impact on Gland.
A higher proportion of new drugs being developed now are Biologics v/s the past. It is looking at working with innovators and Biosimilar companies for CDMO opportunities. To enter this segment, it is looking to leverage its recent contract to supply Sputnik V vaccine to RDIF. “Given its experience in the CDMO segment, via the B2B Injectables business model, Gland is in a strong position to grow this segment meaningfully over the next 3-4 years, ahead of any other competitor in India," Motilal said.
Gland is seeing some pricing pressure in the US Generics industry, although Motilal Oswal said it remains largely insulated due to its B2B business model. Increase in pricing pressure in the US is driven by inventory sell-off by competitors, and absence of USFDA facility inspections.
“Covid-19 has accelerated Gland's geographic expansion aspirations, bolstered by its product portfolio, large manufacturing capacity, and consistent compliance. It is currently leveraging its product registrations in these markets, which it had made earlier. China remains a large long-term opportunity, and GLAND will leverage its parent Fosun’s distribution for some of these products," the note added.
The pharma company is expecting first approvals and revenue generation from China in FY22, with significant headroom to grow, as per the brokerage. Fosun has a distribution network in African markets, which Gland can use to supply products that are already registered.
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