=> The battle against cancer has been an ongoing fight for many years. However, with the advancements in technology, oncology treatments have improved tremendously, giving hope to millions of people worldwide. One company that is making a significant impact in the field of oncology treatment in India is Beta Drugs. 🇮🇳
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| Beta drugs logo |
🏭💰 Company Overview :-
- Beta Drugs is a smallcap company with market capitalization of less than 600 crores.
- They are a leading pharmaceutical company based in India, specializing in the manufacture of oncology drugs.
- The company generates revenue from branded formulations, contract manufacturing, institutional supplies, exports, and APIs.
- They operate in both domestic as well as export markets. They have a wide distribution network which includes 125 distributors and 36 sales representatives in India. They currently export their products in 18 countries either through subsidiaries or sales partners.
- Its facilities were recently approved/audited by INVIMA (Colombia)/INVISA (Brazil), which opens the door to key Latin American markets.
💸💹 Financial Performance :-
- Over the last three years, Beta Drugs recorded a revenue CAGR of 41% and a profit CAGR of 46%. The management aims to double revenue over FY23–26.
- The stock is likely to migrate from NSE’s SME platform to the main bourse in a couple of months.
- In H1FY23, BETADR derived 30% of revenue from branded products; 48% from contract manufacturing for leading companies like Hetero Drugs, Cadila Pharmaceuticals, Alkem Laboratories, Shilpa Medicare, RPG Life Sciences, Glenmark Pharmaceuticals, etc.; 13% from exports; 8% from API; and 1% from the recently launched dermatology and cosmetology divisions.
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| Beta drugs financials |
📈📊 Growth Strategies :-
- Beta Drugs' major growth strategies include:
- Focus on first-to-launch (FTL) or first-few-to-launch (FFFTL) products in the oncology space under its brands
- Thrust on new drug delivery systems (NDDS)
- Expansion in the export market mainly in Latin America/Asia
- Ramp-up of the recently launched dermatology and cosmetology divisions
- Expansion of API business in CEP markets (Europe)
🏭💊💉 Manufacturing Facilities :-
- Beta Drugs currently has three manufacturing facilities:
- The Baddi-1 (or ADLEY Formulations Pvt a fully-owned subsidiary) formulation facility consists of two production blocks, one for injectables, liquids, and vials and another for oral solid dosages (OSD).
- The Baddi-2 (under the Beta brand) formulation facility has three production lines and mainly caters to exports. This facility recently received approval from INVIMA (Columbia) and was audited by ANVISA (Brazil) in March. A Eurasian audit is due in April.
- An API facility (ADLEY) with three production lines (of which two were added recently).
🏭🏭 Backward Integration :-
- Along with low cost production & asset light model (resulting in good ROE), backward integration is also a moat for the company. They are one of the very few pharmaceutical companies who have it installed in their manufacturing.
- Beta Drugs manufactures APIs for 90% of its brands. For example, they manufacture in house the APIs which are used to make formulations in the oncology therapeutic area.
👨👩👧👦📈 Future Growth :-
- With a wide exposure to the export market, client additions in the domestic market, and a healthy balance sheet, Beta Drugs is well-positioned for future growth.
- The company's strong pipeline of FTL/FFFTL products and a ramp-up in exports to Europe and Latin America will contribute to its growth. They have a strong product pipeline of 23 products including NIBs, NDDS & PARP inhibitors which will be off-patent in the coming 5 years.
- The management has guided for a 22–24% EBITDA margin going forward on the back of a turnaround in the dermatology and cosmetology divisions in FY24.
- They plan to expand in their presence to 27 countries by 2025, including places like Latin America, Africa, Asia & CIS. In India, they are focusing to enter & dominate in the tier-2 and tier 3 cities.
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