In our meeting, Mr Govindarajan (MD), emphasised that Aurobindo (ARBP) is well positioned to grow its US business (45% of sales) led by (1) key launches (injectables, OTC) coupled with Natrol and NBO in near term, (2) complex pipeline (oncology, derma, nasal assets) over FY20-21 and (3) inhalers, transd-ermals, depot, biosimilars FY22 onwa-rds. It highlighted visibility to file 40-60 ANDAs per year for next few years. In EU (26% of sales), it sees growth (on acquisition of Apotex’s eastern EU assets) and margin expansion (on backward integration). China is the new focus market and the company expects to scale it up in two-three years.
In near term, growth is expected on key approvals/launches in the US coupled with healthy growth in Natrol (expects double digit growth momentum in FY19 vs. 12% in H1’19), OTC (expects USD 50 mn sales in FY19 vs. USD 22 mn in H1’19 to be led by new approvals) and AuroLife. In the medium to long term, it expects monetisation of oncology, derma, and nasal assets from FY20-21 and monetisation of inhalers (in-house MDI and DPI from Advent), transdermals, depot, biosimilars FY22 onwards. Expects injectable business to grow 30% YoY in FY19 (~USD 200-210 mn vs. USD 86 mn in H1FY19) and over next few years. This will be driven by strong product pipeline and approvals picking up coupled with new injectable facilities (like Unit-12 and Unit-16 apart from Unit-4).
Approval gap (despite EIR for Unit-4 in May’18) has been due to delay in receipt of EIR which led to lag in approval process; going forward, expects approvals to pick up (6-7 approvals in H2’19). Vancomycin: Applied for CB-30 in Oct’18; expects approval in Q4’19 followed by launch in the US. ARBP has entered into an agreement to acquire Sandoz’s portfo-lio of 300 products (approved + pend-ing) with 30% from derma (ranks 2nd).