MOSL: STRIDES SHASUN (Buy)-ANDA approval momentum intact
Strides Shasun: ANDA approval momentum intact
(STR IN, Mkt Cap USD1.0b, CMP INR692, TP INR989, 43% Upside, Buy)
- Final approvals in the recent past (mainly g-Sustiva and g-Viread) and subsequent launches are expected to drive healthy growth in US sales for Strides Shasun (STR). Considering the competitive scenario, we expect STR to garner USD7-8m from g-Sustiva on an annualized basis.
- Mr Arun Kumar is now back as executive chairman of STR. In our view, his experience should prove vital in adding value and combating headwinds facing the industry.
- g-Sustiva – an interesting near-term opportunity: STR recently received final approval for the generic version of Sustiva (Efavirenz) 600mg tablet, which has a market size of ~USD115m. The only other company having final approval for this product is Mylan – it had received final approval in February 2016 (with 180-day exclusivity post approval) and the product was launched on 1 February 2018. Final approval and subsequent launch by STR implies that the delay in launch by Mylan has forfeited its exclusivity. 4-5 other companies have also filed for this product. Considering the competitive dynamics (currently only a two-player market for the product), we expect STR to garner USD7-8m from this product on an annualized basis. In our view, this is an interesting opportunity, given the low base of US sales for STR.
Current filing and approval pace puts STR on a steady footing: STR received three ANDA approvals in 4QFY18, with g-Viread being another good opportunity. STR has 14 ANDA approvals YTD v/s six approvals in FY17. Even the filing pace is healthy – 12 YTD, taking cumulative filings to 74.
Strides Pharma Science Ltd, formerly Strides Shasun Limited, is a vertically integrated global pharmaceutical company. The Company is engaged in the development and manufacturing of active pharmaceutical ingredients (APIs) and formulations, as well as biotech. Its business segments include Pharmaceutical and Biotech businesses. Its geographical segments are Africa, Australasia, North America and Europe, South and Central America, India and Others. The Company focuses on developing complex pharmaceutical products across therapeutic segments. The Company's products include general tablets, hard gelatin capsules, soft gelatin capsules, sachets, dry powders, dry syrups, potent drugs, semi solids, ointments and creams. It is also involved in supplying generics to hospitals approved by the National Health Service (NHS) and over-the-counter (OTC) products through retail outlets. It operates approximately 10 facilities, which are diversified across Asia, Africa and Europe.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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