We agree that clarity on the managements strategy has emerged post the companys integration with Daiichi Sankyo, but an execution track record has yet to be established. In our view, tepid growth in ex-US markets and the ongoing remediation spend create uncertainties on margin trajectory in the near term. We turn more conservative on near-term base business margins, but keep long-term expectations intact. We reset target price to R436, based on 17.5x CY15F EPS of R24.9
The stock corrected almost 30% on 16 September on news of the imposition of an import alert at Mohali. Thereafter, it has rebounded 41% over the past 2.5 months.
The positive development over the period has been the clearance of Ohm Labs and the 483 inspection observations not escalating into a production seize. With this, there remains hope from investors for RBXY to monetise key exclusivities of Diovan, Valcyte and Nexium.