Tag - vaccine

Targeting Sputnik V import by June; to be priced at $10 – Dr Reddy’s Lab

Update on the Indian Equity Market:

On Thursday, the Nifty index ended with gains of 0.8% at 14,406 levels led by Metals and Financials. Within NIFTY50, WIPRO (+3.5%), ICICIBANK (+3.45%), and TATASTEEL (+3.2%) were the top gainers, while SHREECEM (-2.8%), TITAN(-2.7%), and TATACONSUM (-1.9%) were the top losing stocks. Among the sectoral indices, FMCG (-0.7%), PHARMA (-0.4%) and IT (-0.2%) were the losers, and BANK (+2.2%), FINSERVICE (+2.1%) AND MEDIA (+1.9%) were the top gainers.

Targeting May end or early June for Sputnik V import; vaccine to be priced at $10, says Dr Reddy’s Lab

Excerpts of an interview with Mr. G V Prasad, Co Chairman and Managing Director, Dr Reddy’s Laboratories (DRL), aired on CNBC-TV18 dated on 20th April 2021:

  • V Prasad, Co-Chairman and MD at Dr Reddy’s Laboratories (DRL), on Tuesday, said that the target for the import of Sputnik V vaccine, against COVID-19, is May end or early June.
  • DRL is doing its best to accelerate the import and expects to get products launched in Q1FY22E. The cold chain and logistics are in place as they talk to the Russian Direct Investment Fund (RDIF) to accelerate the shipments.
  • He also mentioned that the launch of the India-made Sputnik V vaccine is likely to be in the Q2FY22E. Each manufacturer is in a different stage of the manufacturing process. But he hopes that in Q2 India will have Indian manufactured vaccine available at least from one-two players. So, overall Q2 should see the launch of the Indian vaccine.
  • Prasad clarified the pricing on the vaccine and said it would be uniform across the globe. He added that starting with the imported vaccine, the Russian organization has a uniform price of US $10 across the world. So, when it comes in, it will be priced at the same price that this product is offered anywhere else in the world.
  • The Pharma companies manufacturing the vaccines along with the government will have to come up with a price, which he hopes to be less than the imported price. He assured that the companies will not make profit out of this vaccine and expects the vaccine price not to be higher than US$10. 2 doses of vaccines are required and Mr. Prasad doesn’t think price would be an issue and people are willing to pay this price and don’t need to be subsidized.
  • Meanwhile, he welcomed the government’s announcement of liberalized and accelerated Phase 3 strategy of COVID-19 vaccination from May 1. The government said that anyone above 18 years of age will be eligible for vaccination from May 1. This announcement was a very major move by the government which will improve availability, by decentralizing the whole process, the logistics will be much better and it will be market-driven. So, he is optimistic about the way forward.
  • He believed that the private sector can now fully participate in the vaccine drive now and India will see a rise in availability. A rise in private organizations setting up vaccination centers will be seen and the imported vaccine will immediately relieve some pressure. People will also have the choice to get vaccinated with their choice of vaccines.
  • Last, he noted that there will not be any shortage of Remdesivir in the coming weeks. He said that Favipiravir is still available as it is not in much demand. He thinks there has been a significant overuse of Remdesivir. There is a gap in the market as the shortage was sudden and DRL is doing its best to improve the supply of Remdesivir and from next week onwards, they will have a good number of supplies for this product.
  • On April 5, the RDIF and drug firm Panacea Biotec had said that they had agreed to produce 100 million doses per year of Sputnik V COVID-19 vaccine in India.
  • The efficacy of Sputnik V is 91.6 percent as confirmed by the data published in the leading medical journal, Lancet. It has been registered in 59 countries globally, the statement said. The price of Sputnik V is US $10 per shot, it added.

Asset Multiplier Comments

  • Although DRL denied to comment on the profit margins expected from the vaccine and said they are not here to make profits out of this situation we feel that Pharma sector as a whole will see a high single digit or low double-digit growth in FY22E led by covid’s second wave related opportunities.
  • The increasing cases and lockdowns in major states in India will impact the market sentiment. The investors will rush back to the defensives and Pharma sector being one of them is likely to benefit.

Consensus Estimate (Source: investing. com and market screener websites)

  • The closing price of DRREDDY was ₹ 5,200 as of 22-April-2021. It traded at 26x/ 22x the consensus EPS estimate of ₹ 196/233 for FY22E/ FY23E respectively.
  • The consensus target price of ₹ 5,491/- implies a PE multiple of 23x on FY23E EPS of ₹233/-.


Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”


Will complete phase III trial for COVID vaccine in next 2-3 months – Zydus Cadila

Update on the Indian Equity Market:
On Tuesday, Nifty ended 0.5% higher at 14,200 led by IT and Financials. The top gainers for Nifty 50 were Axis Bank (+6.3%), HDFC (+3.0%), and IndusInd Bank (+2.7%) while the losing stocks for the day were ONGC (-2.0%), JSW Steel (-1.9%), and Hindalco (-1.8%). Top gaining sectors were IT (+2.6%), Pvt Bank (+1.9%), and Bank (+1.6%) while Metal (-1.4%), Realty (-0.4%), and Auto (-0.02%) were the losing sectors.

Edited excerpts of an interview with Mr Sharvil Patel, MD, Zydus Group; dated 04th January 2021 from CNBCTV18:

CADILA’s COVID-19 vaccine received a very good response in the second phase trials. The company is now prepared to carry the third phase of the trials in over 60 sites with 30,000 doses, which it expects to complete in the next two-three months, Mr Patel added.

The phase I/ II data have been found to be safe & immunogenic.

They also expect the efficacy results on the COVID-19 vaccine by the first quarter of FY21.

The subject expert committee in India has already given permission to Cadila Healthcare to conduct phase-III clinical trial protocol for the COVID-19 vaccine.

The Company is making sure that they have the manufacturing capacities while they are working on developing the vaccine.

For the last 6-8 months, the Company has been investing large amounts of its capacities in building for the vaccine. They are able to produce around 150 million doses of the vaccine annually.

The Company has partnered with contract manufacturing organisations where they could potentially transfer their technology to produce another additionally 50-70 million doses and that can also be ramped up depending on the requirements.

On funding, Mr Patel said that these activities are all from internal accruals.

On EBITDA, he said that in the current scheme of thing with the current mix of the business that the Company is doing, they are able to maintain their EBITDA levels. The challenge will be in the coming years when things normalise. With the new portfolio that they are adding to both India and US markets, the Company has been working towards at least maintaining those margins and then over a period of next 3 years further improving this.

Consensus Estimate: (Source: market screener website)
The closing price of Cadila Healthcare was ₹ 486/- as of 05-January-2021. It traded at 26x/ 24x/23x the consensus EPS estimate of ₹ 18.5/20.0/21.6 for FY21E/ FY22E/ FY23E respectively.
The consensus target price of ₹ 454/- implies a PE multiple of 21x on FY23E EPS of ₹ 21.6/-.

Disclaimer: “The views expressed are for information purposes only. The information provided herein should not be considered as investment advice or research recommendation. The users should rely on their own research and analysis and should consult their own investment advisors to determine the merit, risks, and suitability of the information provided.”