Express Pharma

Jubilant Life Sciences pharma revenue is at INR 1,181 crore,up by 46%

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The international revenues are at INR 1,507 crore, around 72 per cent of sales

The board of Jubilant Life Sciences, an integrated global pharmaceutical and life sciences company met recently to approve financial results for the quarter ended June 30, 2018.

Commenting on the company’s performance, Shyam S Bhartia, Chairman and Hari S Bhartia, Co-Chairman & Managing Director, Jubilant Life Sciences said,“We have started the year on a strong note, with the pharmaceuticals business reporting healthy growth and margins. We have witnessed recovery in US Solid Dosage Formulations and also continue to see robust growth in our specialty pharmaceuticals business. Revenue growth in Life Science Ingredients has been led by higher volumes. We have laid the foundation for improved utilisation of assets and financial discipline, leading to strengthening our balance sheet.”

Q1’FY19 Highlights

  • Consolidated revenue at INR 2,079 crore, up 34 per cent YoY
  • Pharmaceuticals revenue at INR 1,181 crore, contributing 57 per cent to revenue, up 46 per cent YoY
  • Life Science Ingredients revenue at INR 847 crore, contributing 41 per cent to revenue, up 21 per cent YoY
  • Others (incl. Drug Discovery Solutions and India Branded Pharmaceuticals) revenue at INR 51 crore, contributing 2 per cent to revenue
  • International revenues at INR 1,507 crore, contributing 72 per cent to revenue; growing 33 per cent YoY
  • EBITDA from Operations of INR 447 crore, up 30 per cent YoY with margins of 21.5 per cent
  • Pharmaceuticals EBITDA of INR 343 crore, up 31 per cent YoY with margins of 29 per cent
  • Life Science Ingredients EBITDA at INR 109 crore; flat growth YoY and margins at 12.9 per cent
  • Others (incl. Drug Discovery Solutions and India Branded Pharmaceuticals) EBITDA at INR 2 crore
  • Depreciation and amortization of INR 88 crore
  • Finance costs at INR 73 crore. Finance costs include borrowing costs of INR 51 crore and non-cash charge on Stock Settlement Instrument of INR 22 crore
  • Reported PAT at INR 203 crore, growth of 38 per cent YoY, with Net Margins at 9.7 per cent and EPS of INR 13 for INR 1 Face Value
  • Net Debt reduction of INR 25 crore
  • Capital Expenditure of INR 138 crore

Pharmaceuticals Business Highlights

Q1’FY19

  • Pharmaceuticals revenue at INR 1,181 crore, up 46 per cent YoY, contributing 57 per cent to the revenues
    Specialty Pharmaceuticals reported revenues of INR 816 crore (growth of 74 per cent YoY and 11 per cent YoY adjusted for acquired Radiopharmacy), contributing 69 per cent to Pharma business sales as compared to 58 per cent in Q1’FY18
    Revenues in API & Generics stood at INR 365 crore, contributing 31 per cent to the business sales
  • Region-wise Revenue break-up
    Revenues from North America at INR 985 crore, contributing 83 per cent to the revenues; up 61 per cent YoY
    Revenues from Europe and Japan were at INR 93 crore, contributing 8 per cent to revenues
    Revenues from Rest of the World stood at INR 82 crore, contributing 7 per cent to the revenues
    India revenues stood at INR 28 crore, Contributing 2 per cent to the revenues
  • EBITDA of INR 343 crore, up 31 per cent YoY with margins of 29 per cent
    Specialty Pharmaceuticals margins at 33.1 per cent (Q1’FY18 numbers exclude Radiopharmacy acquisition of September 2017)
    API & Generics margins at 19.8 per cent; Witnessed revenue growth and margin expansion in US Dosage Formulations
  • R&D spent during the quarter of INR 58 crore – 4.9 per cent to segment sales. R&D debited to P&L is INR 44 crore – 3.7 per cent to segment sales
  • Successful USFDA inspection of Jubilant Cadista and CMO Montreal facilities; Establishment Inspection Report (EIR) received for CMO Montreal
  • Started I-131 MIBG OPTIMUM Phase II Trials in July 2018 with two sites initiated
    The information collected from this study to be submitted to the USFDA under the Orphan Drug Designation program for Jubilant’s NDA filing
    Eligible for accelerated approval if the clinical trials are successful
    Jubilant’s MIBG has already been used for over a decade in USFDA approved expanded access trials and two Pediatric Oncology academic consortiums – NANT (New Approaches to Neuroblastoma Therapy) and COG (Children’s Oncology Group)
  • Rubyfill installations in the US market progressing as per plan
  • Capacity addition underway at Roorkee for Generics as per plan

Portfolio of R&D products – Filings and Approvals

The company has a total of 976 filings across geographies including 898 filings in Dosage (Orals) and 78 filings in Sterile products including JDI. Of this, 655 Dosage (Orals) and 71 Sterile Products have been approved while 250 filings (243 Dosage (Orals) and 7 sterile products) are pending approval.

I. Portfolio of Dosage (Orals), Injectables and Others – Filings and Approvals

Dosage (Orals)

i. Filed 95 ANDAs in the US

60 ANDAs have been approved and 35 ANDAs are pending approval
Filed 2 ANDAs in Q1’FY19; expect to file around 10 ANDAs during the year

ii. Made 803 filings in ROW markets including Canada, Europe and Japan

595 filings in ROW have been approved and 208 filings are pending approval
Injectables and Others

i. Total 4 ANDAs filed and approvals for 2 have been received

II. Portfolio of Radiopharmaceuticals – Filings and Approvals

Filing status as on June 30, 2018:

i. 8 approved registrations in the US

ii. 14 registrations in Canada which all are approved

iii. 8 registrations in Europe of which 7 are approved

iv. In ROW, we have a total of 44 registrations/licenses, of which 4 are pending for approval

Life Science Ingredients Business Review

Q1’FY19

  • Revenues at INR 847 crore; Contributes 41 per cent to total company revenues; up 21 per cent YoY
    Revenues from Key Developed Markets stood at INR 218 crore, up seven per cent YoY; contributing 26 per cent to business revenues
    ROW business stood at INR 87 crore, contributing 10 per cent to business revenues
    India business was at INR 542 crore, up 40 per cent YoY; contributing 64 per cent to business revenues
  • EBITDA at INR 109 crore; flat growth and margins at 12.9 per cent
  • Specialty Intermediates:
    New multipurpose Chlorinated Pyridine plant got commissioned in Q1’FY19
    On track for six new product launches in FY19; Commercialised one product and expect to commercialise the balance during the quarter
  • Life Science Chemicals:
    New Acetic Anhydride plant is progressing as per plan to be commissioned by end Q3’FY19. This will provide additional revenues of INR 300 crore per annum at full capacity
    Favourable prices maintained during the quarter as compared to Q1’FY18
    4th largest Ethanol supplier in the government blending programme. Government of India has decided to raise the price of Ethanol for blending program by INR 2.85 per litre; applicable for supply starting from December 1, 2018
  • Nutritional Products:
    Non-availability of Vitamin A & Vitamin E led to commensurate lower demand of Vitamin B in Feed applications leading to higher inventory and lower prices

Others Segment Review

Q1’FY19

  • Revenues at INR 51 crore, Contributes 2 per cent to total revenues
  • International markets share stood at INR 43 crore, 86 per cent of business revenues
  • Revenues from North America stood at INR 30 crore, contributing 59 per cent to business revenues
  • Europe and Japan business was at INR 10 crore, contributing 19 per cent to business revenues
  • Expanding customer reach to out-license in-house proprietary molecules
  • In India branded pharmaceuticals, steady growth witnessed in prescriptions
  • EBITDA at INR 2 crore

Corporate Announcement

In the press release dated May 23, 2017, it was informed that Jubilant Pharma (‘JPL’), Singapore, a wholly-owned material subsidiary of the company, in its board meeting had resolved that it will evaluate the option of fund raising by way of an Initial Public Offering (‘IPO’) by listing of its equity shares on an international stock exchange, including the Singapore Exchange, in the financial year 2018 with a dilution of not more than 15 per cent of the issued and paid-up equity share capital of JPL. The recent announcement is:

  • The board of directors of the company has taken on record the resolution dated July 23, 2018 passed by the board of directors of JPL recording that the aforementioned evaluation process is on-going and that any fund raising which may be undertaken by JPL will be by way of an IPO and that the maximum dilution of the Company’s shareholding in JPL in the IPO (including any sale of shares of JPL by the Company) will be up to 20 per cent of the fully diluted issued and paid-up equity share capital of JPL.
  • The board of directors of the Company approved that, should an opportunity be provided to the Company in any fund raising by JPL, the Company may offer up to 5 per cent of the ordinary equity share capital of JPL for sale.

Outlook

The company expect to deliver higher revenues and operating profits in FY19. The growth drivers for each of the business are expected to be as follows:

  • Specialty pharmaceuticals:
    New products and current contract execution in Radiopharmaceuticals is expected to drive growth
    Addition of new capacities to meet existing strong demand is expected to drive growth in CMO
    Allergy Therapy Products to witness higher sales due to existing products like Venom and new capacities
  • API & Generics: Growth to be driven by higher volumes from new product launches and market expansions and also from initiatives to optimise costs from higher efficiencies
  • Life Science Ingredients: Current momentum in revenue growth expected to continue backed by healthy demand; Growth in revenues from new product launches, new orders, new capacities coming on stream and debottlenecking of existing plants

As mentioned earlier, to meet the increased demand in the businesses, the company plans to invest about INR 550 crores in capital expenditure and INR 300 crore in R&D during the year. There will be more efforts to strengthen the balance sheet by reducing debt and improving financial ratios.

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