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Glenmark Pharmaceuticals

New US approvals to take earnings to a new high

April 01, 2015

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Compan

y Update Surajit Pal

[email protected] +91‐22‐66322259

Rating BUY

Price Rs788

Target Price Rs1,186

Implied Upside 50.5%

Sensex 28,260

Nifty 8,586

(Prices as on April 01, 2015)

Trading data

Market Cap. (Rs bn) 213.8

Shares o/s (m) 271.2

3M Avg. Daily value (Rs m) 1310.4

Major shareholders

Promoters 48.31%

Foreign 35.07%

Domestic Inst. 5.89%

Public & Other 10.73%

Stock Performance

(%) 1M 6M 12M

Absolute (0.2) 12.1 36.1

Relative 3.5 5.7 10.2

How we differ from Consensus

EPS (Rs) PL Cons. % Diff.

2016 41.9 37.2 12.8

2017 79.5 51.1 55.6

Price Performance (RIC: GLEN.BO, BB: GNP IN)

Source: Bloomberg

0100200300400500600700800900

Apr‐14

Jun‐14

Aug‐14

Oct‐14

Dec‐14

Feb‐15

Apr‐15

(Rs)

Glenmark has seen a steady performance over the last few years and we expect

them to be in a favourable position going forward to gain from a large number of

approvals in the USA and the US sales is expected to grow at a CAGR of 33% for the

next three years. With US accounting for 34% of the existing turnover, GNP we

believe GNP is in a sweet spot. With 64% revenues from US, EU and ROW,

Glenmark is in a favourable position to gain from (a) strong flow of approvals in

US, (b) turnaround in key ROW markets with launch of high‐end drugs and (c)

expansion of operating margin in non‐US exports. Besides, we expect value

unlocking of NCE/biologics, along with consistent growth of 16‐18% in domestic

formulation to turn out to be the inflection point for the company. The company is

set to receive approvals in 25‐30 generics in US along with sole exclusivity in Zetia

in 12‐24 months. Launch of Seretide generics and Oncology drugs in key markets

such as Brazil, Mexico and Russia will expand operating margin of ROW sales.

With strong potential in US generics, India formulations and branded generics in

ROW markets, we expect a CAGR of 36% in revenues in FY14‐17E on rapid progress

in sales and profitability. Key headline margins will be benefitted by 180‐200bps in

FY15E‐17E on company’s progression in high‐end products in the value chain. With

better clarity on US generic potential and Seretide generic approvals in ROW

markets, we increase our core earnings estimates by 12% and 35% for FY16E and

FY17E, respectively. Our core EPS estimates are Rs25.2, Rs42, and Rs58.5 in FY15E,

FY16E and FY17E, respectively. We upgrade our recommendation to ‘BUY’ and

increase TP to Rs1,186, which implies potential upside of 50% at the current

valuation.

Key financials (Y/e March) 2014 2015E 2016E 2017E

Revenues (Rs m) 60,052 65,915 82,953 113,977

Growth (%) 20.3 9.8 25.8 37.4

EBITDA (Rs m) 13,179 14,317 19,660 33,623

PAT (Rs m) 5,423 6,831 11,368 21,572

EPS (Rs) 20.0 25.2 41.9 79.5

Growth (%) (9.9) 26.0 66.4 89.8

Net DPS (Rs) 2.0 2.0 2.0 2.0

Profitability & Valuation 2014 2015E 2016E 2017E

EBITDA margin (%) 21.9 21.7 23.7 29.5

RoE (%) 18.9 20.8 27.6 38.2

RoCE (%) 11.2 12.2 16.7 24.7

EV / sales (x) 4.0 3.7 2.9 2.1

EV / EBITDA (x) 18.1 16.9 12.3 7.1

PE (x) 39.4 31.3 18.8 9.9

P / BV (x) 7.2 5.9 4.6 3.2

Net dividend yield (%) 0.3 0.3 0.3 0.3

Source: Company Data; PL Research

April 01, 2015 2


US generics: Past delays from regulators to bulk‐up approvals in FY16E‐17E: US

revenues are expected to gain 33% CAGR in FY14‐17E on the back of annual

approvals of 12‐15 products. Glenmark’s US revenues had been impacted with

only five approvals in FY15, while it currently has a pipeline of 25 and 20 ANDAs

which are matured more than 36 months and 24 months.

Zetia to lead revenues from key Para‐IV drugs: Glenmark’s US pipeline for

approvals in FY16‐18E comprises of limited competition drugs, FTF opportunities

and branded generics. Zetia, however, will provide best opportunity with

US$240m revenue potential in FY17E. Other key drugs are Welchol, Finacea,

DDAVP, Zyvox, Ortho Tri‐cyclen Lo and Nitroglycerin. There are also few

approvals expected in older generics with sizeable market size like Telmisartan

HCTZ and Clarinex.

Investment in high‐end drugs to provide sustainable growth in the long term:

We believe that current rise in investments is mainly due to inclusion of high‐

end drugs such as inhalers, oncology injectables and dermatology. We expect

the company to venture into biosim opportunities, given the high commercial

benefits and available expertise of R&D in biologics. With focus on key markets,

clinical trials for MDI inhalers is expected in the near term for markets which

allow generic inhalers as automatic substitute to patented inhaler.

India sales continue to outperform industry with expansion in niche therapies:

With support from the portfolio of strong brands and expansion of market share

by 100bps (3.2%) in FY10‐14, we expect domestic sales growth to outperform

industry growth and achieve 18% CAGR in FY14‐17E. The company’s strong

growth is attributed to its focus on fastest growing therapies and strong brand

presence. The company’s core therapy contributes 85% of domestic revenues,

while top‐25 brands contribute 58% of domestic formulations in FY14. However,

an unfavourable verdict on Zita and Zita‐Met may cause loss of sales by 2.6% of

sales and PAT of 1.9% in FY16E.

Russia, Brazil, Venezuela and Mexico hold the key to growth: With 32%

contribution of ROW market, Glenmark has the second most diversified

infrastructure in ROW markets, spanning across Latam, Russia/CIS, Africa and

Asia. This will help the company in mitigating volatility in emerging market

currencies such as Russian Rouble or Venezuelan Bolivar since November 2014.

With focus on oncology drugs to help expanding base in Latam, approvals of

Seretide in key markets such as Russia, Brazil, Mexico and Philippines will boost

company’s sales in FY15E‐18E.

Value unlocking in R&D could reach up to US$100‐120m in FY16E‐17E: With

ongoing clinical development of two NCEs and four NBEs, we expect US$100‐

120m revenues in FY15‐17E. We believe GBR‐500 and GRC‐17536 will be

potential candidates to trigger milestone revenues of US$20m each in FY16E,

while GBR‐1302 (bi‐specific antibody targeting Herceptin 2 & 3) will be a strong

candidate for receiving out‐license fees of US$30‐50m in FY17E.

April 01, 2015 3


Peer disparity in valuing R&D potentials: Compared to its peers (SPARC, Dr

Reddy’s) for their investments in R&D of NDDS/NDA products with potential of

much lower revenues, we find value of Glenmarks’ annual investments of

US$45‐50m for NCE/biologics remains non‐existent in the company’s current

valuation. Rather, the company is punished with lower EPS and lower PE in

comparison to its peers. To derive comparable EPS of Glenmark with peers, we

add back US$50m R&D costs of NCE/NBE research, post adjustment of tax

benefits/shields to core earnings. We forecast adj. EPS of Rs34, Rs67, Rs76 in

FY15E, FY16E and FY17E, respectively.

April 01, 2015 4


Key revenue sources poised for wave of growth

Glenmark conventionally depends upon US generics and Indian formulations for

drawing revenue growth and profitability. With two major divisions for splitting

geographical revenues: Generics and Specialty, Glenmark’s revenues from US and

India formulations remain the key performers of Generics and Specialty businesses,

respectively. With DPCO‐led reforms in prices of essential drugs, we believe India

formulations will be able to provide stable CAGR of 16‐18%, while US generics

growth will highly depend on flow of approvals and robustness of pipeline. With

rectification of R&D strategy for generics since FY12, Glenmark has developed a

competitive product pipeline for US generics, which is poised to grow with an

anticipated pick up in USFDA’s flow of approvals in FY16 onwards.

Exhibit 1: Glenmark’s Business structure built up of global revenues

Source: Company Data, PL Research

Glenmark Pharma

100%

Generics

46%

US Generics

34%

EU Generics

3%

LatAm Oneology Generics

1%

APIs

8%

Speciality / Branded

53%

Domestic Formulation

26%

Semi Regulation Market

17%

LatAm Branded Formulation

6%

EU Branded Generics

4%

NCE Out License

1%

April 01, 2015 5


Exhibit 2: Contribution of major geographies, core sales growth

29 33 34 34 31

31 27 26 25 27

24 24 24 23 25

‐

5

10

15

20

25

30

35

‐

10

20

30

40

50

60

70

80

90

FY11 FY12 FY13 FY14 FY15E

US (%) India (%) ROW (%) Core sales gr (%) (RHS)


Exhibit 3: Glenmark's growth sensitivity more skewed towards growth in US generics

‐10%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

FY11 FY12 FY13 FY14 FY15E FY16E FY17E

Glenmark sales gr (%) India Frmls gr (%) US sales gr (%) (US$)


US generics: New spring is in the offing

With maturity of more than 24 months in 45 ANDAs, Glenmark is poised to receive

strong flow of approvals in FY16‐18. While the delay in approvals (only five approvals

in FY15) is expected to turn FY15 into a lean year with 1% decline in US revenues

(US$ terms), we expect minimum of 24 approvals in 12‐18 months as (a) those many

ANDAs crossed maturity of more than 36 months and (b) anticipated pick‐up of

FDA’s approval activity.

Exhibit 4: FTF opportunities in US

Brand Molecule Originator Branded sales in US (US$ m)

Zetia Ezetimibe MSD (Merck USA) 2,000

Finacea Azelic acid gel 15% Bayer/Intendis 105


April 01, 2015 6


Glenmark’s pipeline for approvals in FY16‐18E comprises of limited competition

drugs, FTF opportunities and branded generics. Welchol, DDAVP, Zyvox, Ortho Tri‐

cyclen Lo, Nitroglycerine and one undisclosed product (sales of >US$50m) offer

opportunities in limited competition drugs, while approvals in Zetia and Finacea will

offer opportunities in sole exclusivity in US. There are few approvals expected in

older generics such as Telmisartan HCTZ and Clarinex which continues to offer

sizeable market size for new generics. We expect approval of old product

Omeprazole in FY15 to offer sizeable sales in FY16E‐17E.

Key Para‐IV drugs to drive upcoming approvals in US generics

We expect new approvals to drive growth in US generics of Glenmark by 32% and

77% (USD terms) in FY16E and FY17E, respectively. Glenmark is gaining traction in US

generics from docile growth of 8% in FY14 and decline of 1% in FY15 due to course

correction with higher allocation of R&D expenses for generics since FY12. The

company’s average yearly filing was 12‐14 ANDAs since FY12, with focus on larger

niche drugs in limited competition opportunities. We believe that management

remains selective in choosing therapeutic areas to make its entry into new

therapeutic areas as it did in OC and controlled substance drugs. Glenmark currently

is focusing on oncology, complex injectables, immunosuppressant and plans for

further foray in derma products. Current filings in key oncology drugs such as

Treanda and Alimta will gain traction from FY18 onwards.

While management has not clarified on new filings in high‐value drugs, we expect

the company to continue with larger share of R&D costs for generics due to strong

probability of foray in Respiratory drugs and Biosim products. Given the company’s

launch of respiratory products in key ROW markets, we expect R&D expenses to rise

to 12% of sales from FY16 onwards on the back of its focus on key developed

markets. With Glenmark’s expertise in developing novel biologics, we also expect the

company to venture in to partnership for developing pipeline of biosims which will

serve the company’s growth in developed markets in the long term.

Exhibit 5: Glenmark's strong progression in ANDA filings post rectifying strategy since FY12

Pending Approval

(FY12)

Pending Approval (9MFY15)

Authorised Distributor

(FY12)

Authorised Distributor

(FY15)

Immediate release 11 31 39 47

Hormones 4 14 11 11

Modified release 4 4 7 9

Derma Prods 3 10 19 23

Controlled substance 0 0 3 4

Oncology injectables 3 8 0 0

Complex injectables 0 5 0 0

Immunosuppressant 0 2 0 0

Others 14 0 0 0

Total 39 74 79 94


April 01, 2015 7


Exhibit 6: Glenmark’s key opportunities in limited competition drugs in US in FY16‐18

Brand Molecule Therapies US Mkt size (US$ m)

FTF holders Expected launch

Expected PV of EPS

(FY16E‐18E)Remark

Clarinex Desloratadine Anti Histamine/COPD

200 Generic FY16 3.9

Market share expected at 5‐12% over medium term among competition of 10 generics.

Welchol Colesevelam hcl CVS (anti cholesterol)

340 Impax/Lupin/Glenmark

April FY1610.7

Glenmark to gain better market share of 10‐15% as Lupin expects delay in approval by 6‐8 months. Expected to be limited competition for the time being

DDAVP Desmopressin Acetate

Anti‐Diuretic 130 Generic May/Jun FY16 2.5

Continue to be limited competition drug among Teva, Mylan, Actavis and Glenmark

Renvela/Renagel Sevelamer Carbonate

Chronic Kidney disorder

907 Shared Jun FY16 1.2

Strong competition with multiple filers including many generic majors: Lupin, Natco, Glenmark, Invagen, Endo, Sandoz, Actavis. Impax already launched AG in Apr 2014.

Micardis HCTZ Telmisartan HCTZ

210 Generic Sept/Oct FY16 5.3

Limited competition expected among Lupin, Mylan, Torrent, Alembic and Glenmark

Undisclosed product

NA NA 50 Generic H2FY16 2.4

Glenmark did not disclose the name of the brand but gave indication of limited competition of 2 generics

Zyvox Linezolid Anti‐microbial

464 Shared Q3FY16 6.0

Limited competition among Teva, Mylan, Glenmark and Gate Pharma

Finacea Azelic acid Dermatology (moderate rosacea)

105 Sole Jul/Aug 2015 19.5

Exclusivity to expire in 2018. Patent challenge is still on in the Court.

Ethinyl Estradiol, Norgestimate

Ortho Tri‐Cyclen Lo

OC (Hormones)

450 Teva Dec‐15 2.8

Teva to launch the drug in Jun/Jul 2015 as per settlement. Lupin, Actavis and Glenmark to follow it up in Dec post exclusivity.

Nitroglycerine Nitroglycerine Multiple use as adjunct therapy

100 Generic Q4FY16 3.1

No generic in US though off‐patent long back. Glenmark previously withdrew from US market as it lacked FDA approval.

Crestor Rosuvastatin CVS (anti cholesterol)

3164 Shared July FY17 2.6

Highly competitive with expected launch of 10 generics.

Zetia Ezetimibe CVS (anti cholesterol)

2000 Sole Dec FY17 19.5

Sole exclusivity of 134 day ends on Apr 25, 2017. Tied with Par Pharma to distribute and share profit equally.

Multaq Dronedarone hcl

CVS (Anti arrhythmia)

319 Actavis/ Shared

Dec FY17 1.8

Actavis claims to have sole exclusivity. Assume limited competition between two generics and expect Glenmark launch in December 2016.

Strattera Atomoxetine hcl ADHD 453 Shared May FY180.1

Expect strong competition as there are 8 TAs. Expect launch of 10 generic on day‐1 of genericisation

Nasonex Mometasone Furoate

Seasonal & Perennial allergix rhinitis

1184 Shared Oct FY18 NA

Initial approvals are expected for Apotex and Teva. Merck lost the case in Appeal court against Apotex but no approval given to generic players yet. Teva was sued post filing in Jul 2014. Concern that the drug could convert into OTC.


April 01, 2015 8


Zetia to drive portfolio of FTF drugs in FY16‐18E

Glenmark’s opportunity in Zetia exclusivity of 134 days in the US is by far the largest

since its foray in the generic market. Zetia is a cardiovascular drug with current US

market size of US$2bn at originator’s price. The company has settled with MSD

(originator) to launch the cardiovascular drug on December 12, 2016, with sole

exclusivity till April 25, 2017. To reduce financial risk in case of adverse legal

outcome from Para‐IV challenge, Glenmark tied‐up with Par Pharma in FY10 with

sharing rights to market and distribute Zetia generic in US during exclusivity.

Assuming equal sharing of profit and 60% market of generics in exclusivity, we

expect Glenmark to gain profit of US$90m in FY17E.

Older approvals in niche continues to yield from Derma and OC

With approvals in Omeprazole, Ashlyna and Tarka in FY15, Glenmark’s core portfolio

of older molecules in US, with sizeable markets and limited competition has been

expanded. Currently, Glenmark receives 30‐35% of core US revenues from older

molecules in derma and OC which are expected to reach 60% in the long term when

patent cliff is likely to impact the flow of new approvals across the industry. In derma

and OC portfolio, Glenmark currently has 24 ANDAs pending for approval, while 34

products are in‐licensed to market and distribute in US. Glenmark’s other major

products in older molecules are Gabapentin, Zolmitriptan, Acamprosate, Riluzole,

Fluticasone, Malarone, Topicort, Bactroban, Vanos, Omeprazole and Hydrocortisone.

Exhibit 7: Glenmark receives five approvals from US FDA in FY15

Brand Molecule Therapies Approval Date Current Mkt Share (%) Remark

Lunesta Eszopiclone CNS 15‐Apr‐14 18Launched on the first day. Currently, ranked third in Rx list

Micardis Telmisartan CVS 7‐Jul‐14 21Approved and launched on day‐1 post 180‐days exclusivity

Vanos Fluocinonide Dermatology 14‐Jul‐14 25Strong opportunity due to limited competition with Taro, Perrigo and Fougera

Prilosec Omeprazole GI 31‐Oct‐14 4Sizeable market still exists though major market shifted to OTC.

Ashlyna Ethinyl Estradiol; Levonorgestrel

OC 23‐Feb‐15 NAOverall market size is US$160m. Launched in branded generics as 4‐5 brands from other generics have strong presence


April 01, 2015 9


Foray in niche therapies continue to drive India sales growth

With support from portfolio of strong brands, Glenmark’s domestic formulations

have been growing at 19% CAGR in FY10‐14 and its market share has increased to

2.2% from 1.2%. Despite India being one of the highly competitive markets for

branded generics, the company’s strong growth is attributed to focus on some of the

fastest growing therapeutic areas and developing strong brands. The core domestic

portfolio focuses on five therapies—dermatology, cardiovascular, anti‐diabetics,

anti‐infective and respiratory which contributes 85% of domestic revenues, while

top‐25 brands contribute 58% of domestic formulations in FY14. With continuation

of alignment of portfolio in fast growing segments, we expect domestic formulations

to achieve 18% CAGR in FY14‐17E.

Exhibit 8: Influence of strong brands drives contribution of Top‐25 products to 58%

Domestic Brands Sales in 2011

(Rs m)Sales in 2012

(Rs m) Sales in 2013

(Rs m)Sales in 2014

(Rs m)

Telma 545 751 968 1,190

Telma‐H 426 522 811 903

Ascoril plus 606 665 738 761

Candid‐B 421 523 616 676

Candid 295 335 447 504

Alex plus Cough 185 245 372 466

Telma‐AM 123 228 322 405

Lizolid 189 204 253 295

Ascoril‐LS 79 95 168 243

Zita‐Met ‐ ‐ 50 370

Candibiotic 141 181 192 235

Milixim 102 110 166 232

Candid mouthwash 133 150 207 220

Altacef 201 180 200 219

Elovera 126 152 184 212

Dubagest 86 102 149 212

Momate 142 150 182 209

Zita ‐ ‐ 7 180

Bon‐K2 32 63 164 198

Razel 85 113 185 196

Glimulin‐MF 106 144 159 191

Candiderma plus 137 142 148 177

Stiloz 89 110 148 172

Tacroz 110 115 146 172

Candid‐V 131 145 182 171

Sales of Top‐25 brands 4,490 5,425 7,164 8,809

Contribution to Dome. Formulations

53 54 55 58


April 01, 2015 10


Exhibit 9: Contribution of Top products in 2014

27

38

58

‐

10

20

30

40

50

60

70

Top 5 products (%) Top 10 products (%) Top 25 products (%)


Exhibit 10: Domestic Revenues over a period

‐

5.0

10.0

15.0

20.0

25.0

30.0

35.0

‐

5,000

10,000

15,000

20,000

25,000

30,000

FY12 FY13 FY14 FY15E FY16E FY17E

Domestic frml (Rs m) Growth (%) (RHS) CAGR (%) (RHS)


Minor impact from HC restriction on sales of Sitagliptin in India

Glenmark received a setback in domestic formulation sales on account of an adverse

court verdict from Delhi HC on the sales of Zita (Sitagliptin) and Zita‐Met (Sitagliptin‐

Metformin) in India. With different salt combinations of Sitagliptin, Glenmark

launched the two branded generics of MSD’s patented drug Januvia and Janumet in

April 2013. While we are unable to forecast the outcome of the Glenmark’s appeal in

Supreme Court, we believe the company could face a sales loss in the short term.

Annual sales of the two molecules are Rs550m (Zita sales: Rs180m, Zita‐Met sales:

Rs370m). If the Court’s order restriction sustain, it would impact domestic

formulation sales by 2.6% and PAT by 1.9% in FY16E.

April 01, 2015 11


Exhibit 11: Sitagliptin market by key players in India

Molecule Company Brand Sales (Rs m)

Sitagliptin MSD Januvia 855

Sun Pharma Istavel 436

Glenmark Zita 180

Mkt size 1,471

Sitagliptin+Metformin MSD Janumet 913

Sun Pharma Istamet 845

Glenmark Zitamet 370

Mkt size 2,128


Exhibit 12: Progress of domestic sales (MAT, monthly sales) over 12 months (AIOCD)


Local brands, respiratory, derma to drive EU generics and brand sales

With US$29m average annual acquisition of local brands, Glenmark’s EU sales

(brands and generic) achieved 35% CAGR in FY11‐14. With focus on derma,

respiratory and anti‐infective therapies, Glenmark plans to foray further in Eastern

Europe and Russia. The company also plans to focus on combination inhalers

(Seretide, Symbicort) where generic inhalers are substitutable to the branded drugs

in the market. We forecast 12% CAGR in EU sales in FY14‐17E.

33.3

‐

10.0

20.0

30.0

40.0

‐

50

100

150

200

Feb'14

Mar'14

Apr'14

May'14

Jun'14

Jul'14

Aug'14

Sept'14

Oct'14

Nov'14

Dec'14

Jan'15

Feb'15

Sales (Mth) Growth (%) (RHS) Avg. Gr. (%) (RHS)

16.9

14.0

14.5

15.0

15.5

16.0

16.5

17.0

17.5

1,400

1,500

1,600

1,700

1,800

1,900

2,000

Feb'14

Mar'14

Apr'14

May'14

Jun'14

Jul'14

Aug'14

Sept'14

Oct'14

Nov'14

Dec'14

Jan'15

Feb'15

Sales (MAT) Growth (%) (RHS) Avg. Gr. (%) (RHS)

April 01, 2015 12


Exhibit 13: EU sales, growth driven by acquisition of local brands

‐

10.0

20.0

30.0

40.0

50.0

‐

1,000

2,000

3,000

4,000

5,000

6,000

FY11 FY12 FY13 FY14

Sales (Brands+Generic) (LHS) Growth (%)

Average gr (%) Growth in Intangible assets (Rs bn)


ROW exports: Russia, Brazil, Venezuela hold the key to growth

With 32% contribution of ROW market, Glenmark has the second most diversified

infrastructure in ROW markets, spanning across Latam, Russia/CIS, Africa and Asia.

While the company focuses on oncology drugs to expand base in Latam in the

medium term, approvals of Seretide in key markets such as Mexico, Philippines and

Russia will boost company’s sales in FY15E‐18E. Glenmark’s sales in Brazil has

received boost with resumption of new flows of approvals after a hiatus of two

years, while strong offtake drives sales in Venezuela. Despite volatile currency

underlining risk in ROW sales and margin, we expect Glenmark’s focus on derma,

oncology and respiratory drugs to drive its ROW revenues by 16% CAGR in FY14‐17E.

Exhibit 14: Latam, SRM, API sales, ROW growth

‐

5

10

15

20

25

30

‐

2,000

4,000

6,000

8,000

10,000

12,000

FY11 FY12 FY13 FY14

Latam SRM API RoW CAGR (RHS)


April 01, 2015 13


Strong pipeline of NCEs to yield positive surprises in FY16‐18

With change in innovation research strategy, the company is currently focusing on

first‐in‐class molecules in comparison to its earlier strategy of best‐in‐class

molecules. This will increase number of out‐license deals with large Pharma

companies as MNC Pharma has adopted more cautious approach and prefer only

successful clinical development of ‘proof‐of‐concept’ or Phase 2(a). We believe

Glenmark’s high‐risk‐high‐return policy for pursuing current pipeline of novel

molecules (which follows unproven pathways) will attract higher probability of out‐

license deals. With growing presence of biologics in global pharma market, Glenmark

has four NBEs (novel biological entity) in clinical development which are in line with

the trend in the global innovation research.

With current portfolio of molecules in clinical development, we expect US$100‐

120m revenues in FY15‐17E. Anticipating multiple data points from the undergoing

molecules, we expect potential trigger point for out‐license income from the pipeline

of NCE/NBE molecules. We believe GBR‐500 and GRC‐17536 to be potential

candidates to trigger milestone revenues of US$20m each in FY16, while GBR‐1302

(bi‐specific antibody targeting Herceptin 2 & 3) will be a strong candidate for

receiving out‐license fees of US$30‐50m in FY17.

Exhibit 15: Brief details of R&D pipeline

Class of molecule Indications Current Status

NCEs

GRC‐17536 TRPA 1 Inhibitor Neuropathic pain Ph‐I completed in Netherlands. Currently, patient enrolling in EU and India are ongoing for POC. 40bn patients worldwide with potential market of US$2bn

Respiratory disorders

Promising result in Ph‐I for respiratory, cough, COPD. Completed ph‐II(a) in UK for respiratory. Recruiting for POC in Cough condition. 300mn patient globally with market size of US$15bn.

GRC‐27864 mPGES‐1 Inhibitor Chronic inflammatory conditions including pain

Optional right to Forest Labs for out‐license the molecule upon successful completion of Ph‐1. Data on the completion of Ph‐1 study is expected in H2FY16.

NBEs

GBR‐500 (Vatelizumab) VLA‐2 Antagonist (mAb)

Multiple Sclerosis Out‐licensed to Sanofi. Only mAb with MS target and completed Ph‐I study in the US. Global patients are more than 1.5m of which 750,000 patients is in US. Potential market size US$3bn.

GBR‐900 TrkA Antagonist (mAb) Chronic pain

First‐in‐class opportunity with a novel pain receptor for treatment of chronic pain. Ph‐I Tox study is completed. Filing for Ph‐I clinical study in UK is completed. More than 100m patients globally. Potential Pain market is more than US$3bn

GBR‐830 OX40 Antagonist (mAb) Autoimmune disorders First anti‐OX40 mAb. Completed Ph‐I Tox study. Filing for Ph‐1 study in FY15 is completed.

GBR‐1302 HER2 xCD3 biospecific antibody

Oncology (Breast cancer) Presently in pre‐clinical development. Expects to obtain approval for initiations of clinical studies in H1FY16 in US.

In‐licensed

Crofelemer CFTR Inhibitor HIV related Diarrhea In‐licensed from Napo pharma for ROW market (140 countries). Salix launched in US in 2013 with API from Glenmark. Ph‐III completed, approval process on. Global patient 10m.

Adult acute infectious Diarrhoea and Cholera

Results of Ph‐III trial is expected in 2015. Glenmark target patients for this indication as it has larger populations in ROW markets.


April 01, 2015 14


Outcome of current R&D in ANDAs to be realised beyond FY18E

With estimates of 43% CAGR in R&D expenses during FY13‐17E, Glenmark’s R&D

costs are likely to increase to 10‐12% of sales on the back of its foray in high‐end

ANDA products. We expect 50‐60% of R&D costs to be allocated for limited clinical

development of respiratory and oncology generics, which will benefit the company

FY18 onwards. With its experience of respiratory products in domestic market, the

company plans to foray initially in to key ROW markets followed by US inhaler

markets. We expect the company to begin clinical trials for MDI inhalers in 2016 and

US launch in FY18E‐19. The DPI inhalers are expected to be launched in US in 2020.

The company’s strategy for respiratory product is to enter only those markets where

generics are allowed for automatic switch from patented drugs. In oncology therapy,

the company is expected to utilise IPR from its previous acquisition in Argentina for

foray in to limited competition drugs in US hospital business. With its strategy for

selective products, we expect Glenmark’s pipeline of oncology injectable to increase

to 20 ANDA from the current pipeline of eight ANDAs.

Exhibit 16: ANDA filings of Glenmark

FY12 FY13 FY14 9MFY15

12 18 20 15


Exhibit 17: Glenmark's Para‐IV opportunities in US beyond FY18

Brand Molecule Therapies US Mkt size

(US$ m)FTF holders

Expected launch

Remarks

Effient Prasugrel CVS 416 Shared FY2019 Strong competition to be on Day‐1 of exclusivity as 15‐16 generics expected.

Alimta Pemetrexed disodium

Oncology 1120 Teva Nov FY23 Expected launch post Teva's sole exclusivity

Bystolic Nebivolol CVS (anti Hypertensive

400 Shared Sept FY22 Case Settled. Glenmark able to launch 3 months before patent expiry along with Hetero, Alkem, Torrent

Vimpat Lacosamide CNS (Anti‐seizures)

350 Shared Mar FY22 Patent Challenge is on in District Court

Banzel Rufinamide Epilepsy 80 Shared NA Patent Challenge is on in District Court

Treanda Bendamustine Oncology 530 Shared NA Glenmark's Shared exclusivity. Patent infringement suit is on.


April 01, 2015 15


Exhibit 18: Top‐15 respiratory drugs in US which could be target for generic players by FY18

Brands Originator US Sales (US$ m) 2014

Advair Discus GSK 4,813

Spiriva Handihaler BI 3,329

Symbicort Astrazeneca 2,246

ProAir HFA Teva 1,149

Nasonex MSD 1,184

Flovent HFA GSK 1,142

Budesonide Generic 1,039

Xolair Genentech/Novartis 1,034

Combivent Respimat BI 892

Ventollin HFA GSK 811

Qvar Teva 695

Dulera Merck 587

Pulmozyme Genentech 537

Advair HFA GSK 437

Montelukast sodium Generic 314


Strong capex for niche products/plants to yield beyond FY17E

With major commitment of US$100m investments for US plants over five years and

requirement of inhaler plants for US filing, the company plans for capex of US$100m

in FY15E and US$80m each in FY16E and FY17E. The US plant is expected to produce

oral solid dosages including controlled substances with an initial investment outlay

which is likely to be US$25m each in FY15E and FY16E. There are investments of

US$40m for major expansion in India (mainly for inhaler plant) and maintenance

capex of US$25m are also budgeted in total capex plan for FY15E.

Exhibit 19: Capex Plan to be higher for new plants in US, India

64

76

8480

100

85 85

50

60

70

80

90

100

110


(US$ m)


April 01, 2015 16


Consolidated sales and headline margins to rise along with new approvals and expansions

With 22% CAGR in core sales derived out of organic growth in FY10‐15E, Glenmark’s

achievement in building globally diversified generic and branded generic business is

one of the best in the industry. US generic is expected to contribute 46% and 47% of

incremental revenues in FY16E and FY17E respectively in comparison to 5% in FY15E.

Domestic formulations will maintain average contribution of 22% of incremental

revenues in FY16E and FY17E vis‐a‐vis exceptionally high contribution of 46% in

FY15E. ROW being the third largest contributor in the company, is expected to

contribute in incremental revenues by 25% and 28% in FY16E and FY17E,

respectively, in comparison to 49% in FY15E.

Exhibit 20: Glenmark's build up in revenues (%)

FY13 FY14 FY15E FY16E FY17E

Glenmark Generics (GGL) 46 47 45 45 52

US Generics 34 34 31 33 42

Europe Generics 3 4 4 3 3

LatAM (Argentina) Oncology 1 1 1 1 1

APIs & Co‐mktg 8 9 9 8 7

Glenmark Specialty (GPL) 53 52 55 51 44

Domestic Formulations 26 25 27 25 22

Semi‐Regulatory Market (SRM) 17 16 12 11 10

LatAm (Excl Argentina‐Mainly Brazil & Others) 6 6 12 11 9

Europe (Branded Generics) 4 4 4 4 3

Core Revenues 99 99 100 96 96

Outlicense Revenues 1 1 0 4 4

Total Revenues 100 100 100 100 100


Exhibit 21: Sales, EBITDA, EBITDA margin

20.1 22.7

20.6 21.9 21.7 23.7

29.5

‐

5.0

10.0

15.0

20.0

25.0

30.0

35.0

‐

20,000

40,000

60,000

80,000

100,000

120,000


Revenues (Rs m) EBITDA (Rs m) EBITDA margin (%) (RHS)


April 01, 2015 17


With large contributions of high value US generics and stable revenues of domestic

formulations, we expect 200bps expansion of core EBITDA margin to 24% in FY17E

from 22% in FY14. Core EBITDA will increase at 21.5% CAGR to reach Rs23.7bn in

FY17E from Rs13.2bn in FY14. Core PAT will grow at 18% CAGR in FY14‐17E with PAT

margin expansion of 180bps to 13.7% in FY17E.

Key financial parameters perform as per guidance

With receivables of 120 days and D/E ratio of 0.9x, the company’s key financial

parameters are stable in FY14E‐17E. We expect current debt of US$550m to be

stable in the near term despite annual capex requirement of US$80‐100m. We

expect back‐ended cash flows to reduce leverage of the company post FY17E due to

windfall gain from Zetia exclusivity and out‐license revenues of US$100‐120m. With

adjustment of Rs1.2bn one‐off expenses, Glenmark’s EBITDA margin is expected to

be 21% in FY15E and forecast 23.7% and 29% in FY16E and FY17E, respectively on

the back of 25‐30 approvals (including Zetia exclusivity) in FY16E‐17E. Better cash

flow and expanded margin will also improve return ratios as adj. ROE and ROCE will

increase to 25% and 24% in FY17E, respectively.

Exhibit 22: Net debt to reduce FY17 onwards

19.1 19.2 21.6

24.7

27.9 28.0

23.9

‐

5.0

10.0

15.0

20.0

25.0

30.0


(Rs bn)


Exhibit 23: D/E ratio also to follow the trend in Net debt

0.89x0.79x 0.78x 0.81x 0.82x

0.78x

0.64x

0.00x

0.20x

0.40x

0.60x

0.80x

1.00x



Exhibit 24: Receivable days (DSO) to remain stable

141

117106

117 120 120 120

0

20

40

60

80

100

120

140

160



Exhibit 25: Break‐up of Receivable days in key geographies

10090

196

0

50

100

150

200

250

US India ROW


April 01, 2015 18


Valuations

Peer disparity in R&D valuations: Glenmark’s R&D for NCE is virtually free

While we are positive on the company’s earnings prospect in FY16E‐17E, we find

unfair comparison of Glenmark’s key financial parameters with its peers. Glenmark’s

average annual R&D spent for NCEs/NBEs has been US$40‐50m, while it received

US$200m revenues on milestone payments from out‐license deals since 2004. The

company’s overall R&D cost (including NCEs and high‐end generics) was 10% of sales

in FY14, which is expected to go up to 12% by FY17E. Among its peers, we find Dr

Reddy’s as the only company who has started to spend 10‐11% of sales in FY15 as

R&D costs for high‐end generics and proprietary products and expected to maintain

the trend of R&D costs of 10‐12% of sales till FY17E. Major Indian Pharma companies

allocate either insignificant part of their R&D costs for discovery‐led R&D or conduct

research through hived‐off entity to maintain high EBITDA margin (e.g. SPARC‐Sun

Pharma Advanced Research).

Exhibit 26: Valuation of Glenmark is at heavy discount to peers

US sales (US$ m) FY15E

ANDAs (No.)EBITDA margin

(before R&D)R&D exps PE (FY16) PE (FY17) ROE ROCE

Sun Pharma (excld RBXY) 2,828 130 50.9 6.4 28.3 24.1 22.0 25.0

Dr Reddy's 2,296 72 34.1 11.2 22.3 19.1 20.0 23.0

Lupin 2,155 95 37.0 9.0 31.3 25.9 26.0 36.0

Zydus Cadila 1,355 144 25.3 7.0 23.7 19.2 24.0 21.0

Glenmark 1,063 74 31.7 10.0 18.7 9.9 19.0 20.0


Hence, comparison of Glenmark’s key financial EBITDA post R&D with peers would

be an unfair assessment of valuation. Among the comparable peers, Dr Reddy’s

trades at PE of 23x and 19x of FY16E and FY17E, while SPARC achieved first time

profit of Rs303m (EPS: Rs1.28) in FY14 post its spin‐off from Sun Pharma in 2006.

SPARC is currently valued at US$1.8bn (a rise of 240% since April 2014).The

company' key financials are: Sales at Rs1.1bn, EBITDA (‐) at Rs0.27bn and EPS (‐) at

Rs1.27 in M9FY15.

Exhibit 27: Brief of SPARC’s financials of few past years

FY10 FY11 FY12 FY13 FY14 9MFY15

Sales (Rs m) 344 584 290 873 1,670 1,130

EBITDA (Rs m) (191) (56) (693) (230) 435 (248)

PAT (Rs m) (216) (85) (722) (225) 303 (301)

EPS (Rs) (1.0) (0.4) (3.5) (1.0) 1.3 (1.3)


April 01, 2015 19


Glenmark’s pipeline of novel molecules has high potential to generate revenues (as

high as US$1bn) with high probability of risk. The company’s R&D objective of first‐

in‐line products, especially in biologics, will have strong potentials for high value out‐

license revenues. In comparison, SPARC and recently Dr Reddy’s have been investing

in NDDS/NDA drugs which focus on improved technology and delivery systems to

enhance efficiency. With very few successes (such as Cipro XR, Sotret and i) of the

NDDS drugs in US since 2000 (launched by Indian majors), there are multiple risks

involved in R&D of NDDS/NDA products:

(a) Small window of three years exclusivity

(b) Time‐sensitive risk of acceptance among medical practitioners and end users

(c) Acceptance of leading insurance companies/PBMs to gain inclusion in their

formularies which require comparative study to show significant benefits over

existing leading brands/originator drug

(d) Competitive pressure from substitutable generics and branded generics of the

molecule on which the NDDS is derived. This will limit pricing power of the NDDS

products

(e) Upfront costs for promotion (in case of branded NDDS) and maintenance of high

cost sales team in developed markets

Exhibit 28: Strong disparity in R&D valuation is at display between Glenmark, SPARC

Source: Bloomberg, PL Research

While investments in NDDS research remains low, the high underlying risks of

commercial success turn risk‐return matrix unfavourable in many NDDS products.

We see many unsuccessful branded and non‐branded NDDS products in US such as

Sun Pharma’s Doceferez, Venlafaxine XR Tabs, Alembic’s Desvenlafaxine and

Ranbaxy’s Riomet and Ximino. Comparing valuation of SPARC and Dr Reddy’s R&D

potentials vis‐a‐vis its valuations, we believe Glenmark’s huge potentials in NCEs and

biologics has been virtually non‐existent in the current valuation of the company.

‐

50

100

150

200

250

300

350

400

Mar‐14

Apr‐14

May‐14

Jun‐14

Jun‐14

Jul‐14

Aug

‐14

Aug

‐14

Sep‐14

Oct‐14

Oct‐14

Nov‐14

Dec‐14

Dec‐14

Jan‐15

Feb‐15

Mar‐15

Mar‐15

Glenmark Pharmaceutical Sun Pharma Advanced

April 01, 2015 20


Exhibit 29: One year forward Price / Earnings still below average PER

Source: Company Data, Bloomberg, PL Research

Exhibit 30: Glenmark current valuation has yet to show strong earnings potential in FY16E‐17E

Source: Company Data, Bloomberg, PL Research

To derive comparable EPS of Glenmark with peers, we add back (assumed) US$50m

R&D costs of NCE/NBE research post adjustment of tax benefits/shields to core

earnings and estimate adj. EPS of Rs34, Rs67, Rs76 in FY15E, FY16E and FY17E,

respectively. With conservative assumptions of growth in the near‐to‐medium term,

we derive value of the company following SOTP of valuations in FCFF and PER

methodologies. We upgrade our recommendation to ‘BUY’ with increase in TP to

Rs1,186.

18.7

83.7

22.5

18.0

8.20.010.020.030.040.050.060.070.080.090.0

Mar‐05

Sep

‐05

Mar‐06

Sep

‐06

Mar‐07

Sep

‐07

Mar‐08

Sep

‐08

Mar‐09

Sep

‐09

Mar‐10

Sep

‐10

Mar‐11

Sep

‐11

Mar‐12

Sep

‐12

Mar‐13

Sep

‐13

Mar‐14

Sep

‐14

Mar‐15

P/E (x) Peak(x) Avg(x) Median(x) Min(x)

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

Apr‐10

May‐10

Jun‐10

Jul‐10

Aug‐10

Sep‐10

Oct‐10

Nov‐10

Dec‐10

Jan‐11

Feb‐11

Mar‐11

Apr‐11

May‐11

Jun‐11

Jul‐11

Aug‐11

Sep‐11

Oct‐11

Nov‐11

Dec‐11

Jan‐12

Feb‐12

Mar‐12

Apr‐12

May‐12

Jun‐12

Jul‐12

Aug‐12

Sep‐12

Oct‐12

Nov‐12

Dec‐12

Jan‐ 13

Feb‐13

Mar‐13

Apr‐13

May‐13

Jun‐13

Jul‐13

Aug‐13

Sep‐13

Oct‐13

Nov‐13

Dec‐13

Jan‐14

Feb‐14

Mar‐14

Apr‐14

May‐14

Jun‐14

Jul‐14

Aug‐14

Sep‐14

Oct‐14

Nov‐14

Dec‐14

Jan‐15

Feb‐15

Mar‐15

P/E (x) Average (µ) (µ+σ) (µ‐σ)

April 01, 2015 21


Exhibit 31: Revenue Break up

FY12 FY13 FY14 FY15E FY16E FY17E

Domestic Formulation 10,021 13,096 15,105 17,820 21,027 24,602

YoY gr. 18.6% 30.7% 15.3% 18.0% 18.0% 17.0%

LatAm (Branded) 2,869 2,940 3,655 7,679 8,831 10,421

YoY gr. 49.5% 2.5% 24.3% 110.1% 15.0% 18.0%

SRM (incl Crofelemer) 5,926 8,493 9,869 8,038 9,609 11,312

YoY gr. 45.6% 43.3% 16.2% ‐18.6% 19.5% 17.7%

Europe (Branded) 1,976 2,017 2,668 2,702 3,189 3,699

YoY gr. 29.4% 2.0% 32.3% 1.3% 18.0% 16.0%

NCE Outlisence Income 2,535 493 366 299 3,100 4,340

YoY gr. 183.2% ‐80.6% ‐25.9% ‐18.2% 936.4% 40.0%

GPL 23,328 27,038 31,662 36,538 45,755 54,373

YoY gr. 38.4% 15.9% 17.1% 15.4% 25.2% 18.8%

US & EU generics 12,137 16,887 20,270 20,539 27,068 48,023

YoY gr. 45.3% 39.1% 20.0% 1.3% 31.8% 77.4%

Europe (Generic) 1,031 1,707 2,392 2,405 2,790 3,209

YoY gr. 89.7% 65.5% 40.2% 0.5% 16.0% 15.0%

Argentina Onco. (Generic) 142 340 391 430 494 593

YoY gr. ‐64.5% 138.6% 15.0% 10.0% 15.0% 20.0%

API 3,094 3,976 5,353 5,987 6,885 7,849

YoY gr. ‐7.3% 28.5% 34.6% 11.8% 15.0% 14.0%

GGL 16,405 22,910 28,407 29,362 37,237 59,674

YoY gr. 29.9% 39.7% 24.0% 3.4% 26.8% 60.3%

Gross Sales 39,733 49,949 60,069 65,899 82,993 114,047

YoY gr. 34.7% 25.7% 20.3% 9.7% 25.9% 37.4%

Add: Other Operating Rev. 491 19 233 314 339 373

Less: Excise 18 32 250 298 378 443

Net Operating Revenues 40,206 49,935 60,052 65,915 82,953 113,977

YoY gr. 36.3% 24.2% 20.3% 9.8% 25.8% 37.4%


April 01, 2015 22


Income Statement (Rs m)

Y/e March 2014 2015E 2016E 2017E

Net Revenue 60,052 65,915 82,953 113,977

Raw Material Expenses 18,730 21,093 25,716 33,053

Gross Profit 41,322 44,822 57,238 80,924

Employee Cost 10,261 12,722 15,180 18,236

Other Expenses 17,881 17,784 22,397 29,064

EBITDA 13,179 14,317 19,660 33,623

Depr. & Amortization 2,168 2,616 3,253 3,873

Net Interest 1,886 2,019 2,123 2,227

Other Income 115 455 478 493

Profit before Tax 9,240 10,136 14,763 28,016

Total Tax 1,513 2,046 3,395 6,444

Profit after Tax 7,728 8,091 11,368 21,572

Ex‐Od items / Min. Int. (2,305) (1,260) — —

Adj. PAT 5,423 6,831 11,368 21,572

Avg. Shares O/S (m) 271.2 271.2 271.2 271.2

EPS (Rs.) 20.0 25.2 41.9 79.5

Cash Flow Abstract (Rs m)

Y/e March 2014 2015E 2016E 2017E

C/F from Operations 8,537 1,086 3,224 6,902

C/F from Investing (3,681) (6,359) (5,323) (5,330)

C/F from Financing (2,960) 3,284 3,303 4,260

Inc. / Dec. in Cash 1,896 (1,989) 1,204 5,833

Opening Cash 6,248 8,145 6,156 7,359

Closing Cash 8,145 6,156 7,359 13,192

FCFF 1,863 (2,276) 1,481 6,059

FCFE 6,884 (852) 2,764 7,796

Key Financial Metrics

Y/e March 2014 2015E 2016E 2017E

Growth

Revenue (%) 20.3 9.8 25.8 37.4

EBITDA (%) 28.0 8.6 37.3 71.0

PAT (%) (9.8) 26.0 66.4 89.8

EPS (%) (9.9) 26.0 66.4 89.8

Profitability

EBITDA Margin (%) 21.9 21.7 23.7 29.5

PAT Margin (%) 9.0 10.4 13.7 18.9

RoCE (%) 11.2 12.2 16.7 24.7

RoE (%) 18.9 20.8 27.6 38.2

Balance Sheet

Net Debt : Equity 0.8 0.8 0.6 0.4

Net Wrkng Cap. (days) 47 154 150 146

Valuation

PER (x) 39.4 31.3 18.8 9.9

P / B (x) 7.2 5.9 4.6 3.2

EV / EBITDA (x) 18.1 16.9 12.3 7.1

EV / Sales (x) 4.0 3.7 2.9 2.1

Earnings Quality

Eff. Tax Rate 16.4 20.2 23.0 23.0

Other Inc / PBT 1.2 4.5 3.2 1.8

Eff. Depr. Rate (%) 5.7 5.9 6.6 7.1

FCFE / PAT 126.9 (12.5) 24.3 36.1

Source: Company Data, PL Research.

Balance Sheet Abstract (Rs m)

Y/e March 2014 2015E 2016E 2017E

Shareholder's Funds 29,833 35,983 46,282 66,786

Total Debt 32,670 34,094 35,376 37,114

Other Liabilities (4,488) (4,858) (5,284) (6,106)

Total Liabilities 58,015 65,218 76,375 97,794

Net Fixed Assets 30,357 33,940 35,958 37,355

Goodwill 602 662 728 801

Investments 537 425 425 425

Net Current Assets 26,518 30,191 39,264 59,213

Cash & Equivalents 8,007 6,156 7,359 13,192

Other Current Assets 39,620 40,309 49,498 65,650

Current Liabilities 21,109 16,274 17,594 19,629

Other Assets — — — —

Total Assets 58,015 65,218 76,375 97,794

Quarterly Financials (Rs m)

Y/e March Q4FY14 Q1FY15 Q2FY15 Q3FY15

Net Revenue 16,817 14,778 16,715 16,921

EBITDA 3,598 3,332 3,260 2,565

% of revenue 21.4 22.5 19.5 15.2

Depr. & Amortization 603 651 650 655

Net Interest 464 481 510 513

Other Income 97 126 101 113

Profit before Tax 2,628 2,326 2,202 1,510

Total Tax 19 477 552 363

Profit after Tax 431 1,848 1,651 1,148

Adj. PAT 431 1,848 1,651 1,148

Key Operating Metrics

Y/e March 2014 2015E 2016E 2017E

Generics 23,053 23,375 30,353 51,825

US Formulations 20,270 20,539 27,068 48,023

EU Formulations 2,392 2,405 2,790 3,209

LatAm Formulations 391 430 494 593

APIs — — — —

Branded 31,297 36,239 42,531 49,723

India Formulations 15,105 17,820 21,027 24,602

ROW Formulations 9,869 8,038 9,485 11,002

LatAm Formulations 3,655 7,679 8,831 10,421

EU Formulations 2,668 2,702 3,189 3,699

Source: Company Data, PL Research.

April 01, 2015 23


Prabhudas Lilladher Pvt. Ltd.

3rd Floor, Sadhana House, 570, P. B. Marg, Worli, Mumbai‐400 018, India

Tel: (91 22) 6632 2222 Fax: (91 22) 6632 2209

Rating Distribution of Research Coverage PL’s Recommendation Nomenclature

45.7%

37.2%

16.0%

1.1%

0%

10%

20%

30%

40%

50%

BUY Accumulate Reduce Sell

% of Total Coverage

BUY : Over 15% Outperformance to Sensex over 12‐months

Accumulate : Outperformance to Sensex over 12‐months

Reduce : Underperformance to Sensex over 12‐months

Sell : Over 15% underperformance to Sensex over 12‐months

Trading Buy : Over 10% absolute upside in 1‐month

Trading Sell : Over 10% absolute decline in 1‐month

Not Rated (NR) : No specific call on the stock

Under Review (UR) : Rating likely to change shortly

DISCLAIMER/DISCLOSURES

ANALYST CERTIFICATION

We/I, Mr. Surajit Pal (PGDBA, CFA, M.Com), Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report.

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Documents

Glenmark Pharmaceuticals - Business Standardbsmedia.business-standard.com/_media/bs/data/market...Glenmark Pharmaceuticals New US approvals to take earnings to a new high April 01,