Laurus Labs - Company Overview

Laurus Labs : Company & Business Overview

Shuchi.P.Nahar

Twitter: @shuchi_nahar

 1. Company Profile & Background

Laurus Labs is a leading R&D driven pharmaceuticals company established in 2005 with its headquarters in Hyderabad. It is among the leaders in the manufacturing of Active Pharmaceutical Ingredients (APIs) for Antiretroviral (ARV) and Hepatitis C (Hep-C) formulations. Other major API segments include therapeutic areas such as Oncology, Cardiovascular, and Anti-Diabetes.

·       From a one-product company in 2010 to an Active Pharmaceutical Ingredients (APIs) company thereafter, company has now emerged as one of India’s leading manufacturers of generics APIs for various complex therapies.

·       Company is thriving on growth opportunities in formulation manufacturing, addressing the critical needs of the world’s key pharmaceutical markets.

·       Over the years, the most important enablers of this transformation has been their People, Plants, Products, and their Processes, encapsulated as ‘4Ps’. 

2. Revenue Comparison 2019 v/s 2020

•       Total Revenue showed a robust growth of 32% for the quarter (Y-o-Y) & 24% for FY20 (Y-o-Y).

•       Generic FDF business recorded significant growth for the quarter and FY20.

•       The robust growth was led by higher sales from tender business in LMIC having strong order book for coming quarters.

•       Synthesis Business recorded strong growth. The business showed a healthy growth of 34% for the quarter (Y-o-Y) and 31% for FY20 (Y-o-Y). Growth was led by higher contribution from CDMO business.

3. Strategy for various Business Segment

a. Formulation – 29% Revenue Contribution in (FY 20)

• Strategic Partnerships with multilateral agencies providing access to major tenders

• Actively Participating in In-Country Tenders

• Focused on executing large sized opportunities from tenders in coming quarters

• Cumulatively filed 11 products in various LMIC markets 

• Filed 4 Triple Combination products – DLT, TLE600, TLE400 & TEE Approvals

• Filed 26 ANDAs with USFDA - 6 final approvals and 5 tentative approvals. In addition, completed 2 products validation

• 10 in Canada, 6 in Europe, 8 with WHO, 2 in South Africa, 2 in India & 11 products filed in various ROW markets. 

•       The company has added several new customers with programs in various clinical stages and also completed several projects in various stages from preclinical to commercial scale. 

•       It is working with large Global Innovator pharmaceutical companies and mid/small Biotech companies.

•       Merged Ingredients business division with Custom Synthesis business in order to have clear demarcation on Products and Strategy.

•       Sizeable revenue generating from Unit 5 for Aspen. Commercial supplies started for 2 products  

c.     Generics – APIs – 57% Revenue Contribution in (FY 20)

•      The company is working with 9 of the top 10 large global Generic pharma companies for contract manufacturing of generic APIs. This is a growing business and growth in the segment will be led by both new launches and increase in market share of existing products.
•      Huge growth opportunity on offer with global supply disruptions in the market. Focusing on key therapeutic segments like Anti Diabetic, PPIs, & CNS.
•      Products commercialized for Contract Manufacturing opportunities with an EU Customer. Contract Manufacturing is a growing business with global generic partners. Additional revenue from commodity ingredients are merged into Generic API business
 
4.     Strong Research and Development – Backbone of the Company 

•       A team of well-qualified and skilled professionals in R&D centres spread across multiple locations  are specialised across the value chain of research, and process development of advanced intermediates, ingredients and contract research.

•       The R&D team mainly emphasises on process development, absorption of technologies and establishment of technologies at a commercial scale. Have a healthy order book for FY 21 & Beyond in FDF Contract business with a strategic partner in EU.

•       Filed 26 ANDAs with USFDA and 6 final and 5 tentative approvals. Expected to file 8-10 ANDAs annually with a focus on ARV, CVS, CNS and PPI with few para IV opportunities

•       Filed 257 patent applications and 116 patent granted as on March 31, 2020

•       2 product validation completed for formulation apart from filling of 26 ANDAs and NDAs

5. Infrastructure Facility - Company’s Strength
 

•       Company currently operate six manufacturing facilities in Visakhapatnam, Andhra Pradesh and one facility in Hyderabad. At five of these facilities, we manufacture drug substances.

•       The sixth facility is well-equipped to manufacture both drug products and drug substances. Company operate a Kilo Lab facility at their R&D centre in Hyderabad.

•       Investment in R&D and manufacturing facilities enables company to expand their product portfolio, technical capabilities, geographic reach and manufacturing capacity.

 6. Management Guidance

• The formulations segment is going to be the new growth engine while the synthesis and ingredients businesses are expected to continue to grow.
• Continue to undertake Brown Field Capex programme for Capacity addition in line with strong Order Book visibility and business outlook.
• Doubling FDF capacity by FY22.
• The company incurred a capex of INR 230 crores in FY20, and has guided for a capex in excess of INR 300 crores for FY21. It has upped the initial guidance from INR 250 crores for FY21 based on the robust order book for its products.
• All the capex opportunities are brownfield in nature and have a 1.5-2x revenue potential. These capex programs will have a shorter payback period and are expected to be a ROCE accretive.

References: 

        Laurus Lab Annual Report 2019-20 , 2018-19, 2017-18

                   Investor Presentation Q1FY21, Q4FY20, Q4FY19, Q4FY18

                   Conference Call Transcript Q1FY21, Q4FY20, Q4FY19, Q4FY18

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