Strides Pharma Science Ltd · NSE:STAR
Strides Pharma Science — Investor Presentation (February 2024)
48 slides from Strides Pharma Science's investor presentation, Feb 2, 2024
Slide 1: Regulation 30 intimation to stock exchanges
February 2, 2024 BSE Limited The National Stock Exchange of India Limited Phiroze Jeejeebhoy Towers, Exchange Plaza, Bandra-Kurla Complex Dalal Street, Mumbai – 400 001 Bandra (E) Mumbai - 400 051 Scrip code: 532531 Scrip code: STAR Dear Madam/ Sir, Sub: Intimation under Regulation 30 of SEBI (Listi
Slide 2: Strides Pharma Science Ltd
Strides Pharma Science Ltd Feb 2024 1
Slide 3: Safe Harbor
Safe Harbor Except for the historical information contained herein, statements in this presentation and the subsequent discussions, which include words or phrases such as "will", "aim", "will likely result", "would", "believe", "may", "expect", "will continue", "anticipate", "estimate", "intend", "p
Slide 4: Strides Reset Completed, Now Poised for Growth
Strides Reset Completed, Now Poised for Growth Consistent Revenue growth of high teens over last 18months (In INR Crores) FY22 FY23 YoY % 9MFY24 YoY %* Expansion of product New Product Launches Significant pick-up in offerings to new Revenue 3,095 3,704 +20% 2,997 +17% in the Front-end B2B business
Slide 5: Way Forward for Strides Excluding Soft Gelatin Capsule Business
Way Forward for Strides Excluding Soft Gelatin Capsule Business (Divested to OneSource) Mid-Teens Revenue Growth + EBITDA Margin Expansion + Capital Efficiency = Improving ROCE towards 20%+ levels EBITDA Net ROCE: Revenue Growth: Working Net Debt to FY25 Target* Growth: Opex: EBITDA: ~20% Capital ~$
Slide 6: Strides at a Glance: A Pharma Formulation Exports Player
Strides at a Glance: A Pharma Formulation Exports Player 9MFY24 Annualized 9MFY24 Annualized Revenue Manufacturing Footprint Split 7 Mfg. Plants including Revenue ~$485 M 4 USFDA approved facilities 8% 10% Gross Margin ~59% Quality Compliance 51% Successful compliance track record with Global regula
Slide 7: US remains a focus market for Strides; Reset for Profitable Growth
US remains a focus market for Strides; Reset for Profitable Growth US Business Quarterly Revenue Ramp up 9MFY24 Annualized Revenue Split (in $ Million) 67 63 63 61 60 57 46 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 51% US Business Annual Revenue (in $ Million) 250 232 157 US Business FY22 FY2
Slide 8: Large Approved Portfolio provides Leeway to Scale up the US Business
Large Approved Portfolio provides sufficient Leeway to Scale up the US Business Existing Portfolio Strength Growth Levers in Place Pipeline of 100+ Approved products of 260+ ANDAs filed which 50+ products to be launched 235+ ANDA Approvals over the next 36 months Targeting a Revenue of New domain ad
Slide 9: Strides among the Leading Indian Players in the US Market
Strides among the Leading Indian Players in the US Market Strides among the Top 10 Players servicing the US Markets 2,000 Strides has a differentiated strategy for its US Business – Market Leadership in Niche Products 1,500 1,000 • Unlike other Generic Pharma Players, Strides has Profitably establis
Slide 10: Other Regulated Markets: Growing at a Steady Pace
Other Regulated Markets: Growing at a Steady Pace Other Regulated Markets Revenue 9MFY24 Annualized Revenue Split (in $ Million) 41 40 40 34 35 32 26 Q1FY23 Q2FY23 Q3FY23 Q4FY23 Q1FY24 Q2FY24 Q3FY24 31% Other Regulated Markets 152 134 121 Other Regulated FY22 FY23 9MFY24 Annualized 9
Slide 11: Growth Pivots
Portfolio Maximization and Strategic Partnerships to Drive the Other Regulated Markets Growth The UK and other front-end markets have returned to their previous levels of growth and profitability Front End • Portfolio of 40+ launched Products with Top 3 Rank in 1/4th of the Portfolio Markets • Pipel
Slide 12: Growth Markets: Positioned for strong growth via new geographies & new products
Growth Markets: Positioned for strong growth via new geographies & new products 9MFY24 9MFY24 Annualized Annualized Revenue Revenue Split Split Growth Markets Existing New Geographies 10% Aspiring to grow Africa LATAM MENA CIS APAC Emerging markets (Growth & Access) to $ 200m over the next 4-5 years
Slide 13: Deepening Presence in Existing Geographies & Establishing Footprint in New Geographies
Deepening Presence in Existing Geographies & Establishing Footprint in New Focus Geographies Established Geographies Strategic New focus Geographies partnerships Focused Expansion South Africa Business Africa Business Focused Expansion Strategic Partnerships African Pharma market is Latin America (L
Slide 14: Access Markets: A Tender-driven Business
Access Markets: A Tender-driven Business; Not a Primary Focus for Strides 9MFY24 Annualized Revenue Split Access Markets Revenue (in $ Million) 39 38 8% FY23 9MFY24 Annualized Access Markets Key Highlights • Access markets Revenues continues to be lumpy as the business is Tender driven, however this
Slide 15: OneSource: Years of Investments, Time for Fruition
OneSource: Years of Investments, Time for Fruition ➢ Strides announced creation of “OneSource” in Sep’23 ➢ An independent Specialty Pharma CDMO ➢ Will unlock value to shareholders ➢ Listing* expected in next ~12 months 14 * Transaction subject to approval of Shareholders, Lenders and other applicabl
Slide 16: Value discovery and Unlocking Potential
Value discovery and Unlocking Potential Value unlock for Strides Shareholders ➢ India’s first Specialty Pharma CDMO covering Biologics, • Creation of two distinct operating entities with focused executive teams complex Injectables and Oral • Strides shareholders to participate in value discovery by
Slide 17: OneSource: Creation of India's first Specialty Pharma Pure Play CDMO
OneSource: Creation of India’s first Specialty Pharma Pure Play CDMO Strides Current Businesses to be Merged Holding Strides Shareholders will own 44% of the economics of OneSource Biologics and high-end drug devices ~31% combination (Existing Business of Stelis) OneSource: Oral technologies (Soft G
Slide 18: Resultant Cap Table of OneSource (Currently Stelis)
Resultant Cap Table of OneSource (Currently Stelis) Category Pre – Scheme* Post - Scheme Number of Shares % Share Holding Number of Shares % Share Holding Promoter and 12,586,085 29.93% 42,321,592 39.00% Promoter Group Strides Group** 12,929,220 30.74% Public 16,541,349 39.33% 66,205,489 61.00% Tota
Slide 19: Financials & Valuation Synopsis
Financials & Valuation Synopsis: Valuation of OneSource based on valuation report of PWC and fairness opinion of Jefferies In $m FY24* Strides FY24* Revenue FY24* EBITDA Equity Value Strides Value Net Debt Ownership - Soft Gel Business ~65 M ~30% ~35 M 293 M 100% 293 M SteriScience ~60 M ~28% ~25 M
Slide 20: Way Forward, Set for Profitable Growth
Way Forward, Set for Profitable Growth Way Forward Target FY24 FY25 Medium Term Outlook Revenue ~$145 M ~$190 M OneSource has potential to double EBITDA Margin ~25% ~30% its scale in 3-4 years mainly from the momentum from biologics and Net Debt ~$115 M ~$50 M high-end drug device combinations in GL
Slide 21: OneSource: Growth Enablers
OneSource: Growth Enablers 20
Slide 22: Global pharma and biologics players are leaning towards a partnership model
The global pharmaceutical and biologics players are leaning towards a partnership model for developing and manufacturing their existing products Global CDMO market split by product type (2021-28) Billions of USD CAGR% Outsourcing to specialized organizations helps global players lower drug 180 (2022
Slide 23: Strides group is combining its assets to build an advanced specialty CDMO
Strides group is combining its assets to build one of most advanced technology led specialty CDMO Biologics Soft Gelatin Capsules Complex & Specialty injectables Drug-Device Combinations Microbial biopharmaceuticals Rx Soft gelatins Out-licensing Formulation development Mammalian biopharmaceuticals
Slide 24: Robust capabilities address a substantial market opportunity in CDMO
Our robust capabilities form the bedrock for addressing a substantial market opportunity within the expanding CDMO landscape. Growth Enablers Specialties Biologics and Drug-Device Soft Gelatin Complex and Combinations capsules ready to use products • Fully integrated capabilities from cell line • 15
Slide 25: OneSource Capability Set Snapshot
OneSource Capability Set Snapshot Five manufacturing facilities have received certification from international authorities, and OneSource is making bigger plans for the future R&D and Process Development Soft gelatin capsules Biologics , Bengaluru, India Specialty, Bengaluru, India (1) Specialty, Be
Slide 26: Significant investments in quality systems and compliance
Significant investments in quality systems and compliance with industry leading quality governance framework ENABLERS ARCHITECTURE QUALITY CULTURE Systems Deployment Proactive People Improvements Governance Responsive Process Product Facility Risk & Mitigation Metrics All Time Compliance 25
Slide 27: Growth lever 1: Biologics and Drug-Device combinations
Growth lever 1: Biologics and Drug-Device combinations Our capabilities are tailored to provide development and manufacturing services throughout the lifecycle of biologics and complex products 26
Slide 28: Fully-integrated biopharmaceutical platform, one-stop-shop for biologics
In the CDMO business, OneSource would offer a fully-integrated biopharmaceutical platform providing one-stop-shop offering for biologics Truly One-stop Offering Master and Cell Culture Filtration and Cell-line Development Working Cell Formulation Fill and Finish Packaging Production Purification Ban
Slide 29: A strong biologics CDMO division with world-class capabilities
A strong biologics CDMO division with world-class capabilities and capacities enabling cost-effective solutions One Stop Capabilities Flexible and Partner Centric ▸ Pure play biopharmaceutical CDMO ▸ Two state-of-the-art facilities, with covering drug substances capabilities across ~550,000 square f
Slide 30: Business model for biologics recovers several income streams
Business model for biologics is uniquely poised to recover several income streams until the product approvals are secured Biologics CDMO Division Business Model • First part of the CDMO contract which typically includes the technology transfer, process development, process scale and execution of Man
Slide 31: Balanced Generics and Innovators' commercial strategy
OneSource would have a balanced Generics and Innovators’ commercial strategy to deliver near and long-term results Complex Generics & high-end devices Biologics Initial commercial focus leveraging spare capacity. Long term core strategy with good risk-reward • Faster ramp up to commercial scale proj
Slide 32: Proven Drug Substance Capability
Proven Drug Substance Capability Talented scientific and cross functional team has proven experience in trouble shooting and delivering innovative solutions to clients globally End-to end-development and Successful tech transfer and scale-up of manufacturing (DS + DP) of teriparatide cell culture ba
Slide 33: Drug Substance manufacturing kicked-off with a global generics major
Drug Substance manufacturing kicked-off in partnership with a global generics major; Mammalian DS development and manufacturing of a biosimilar for one of the largest biologics Partner is a top 5 global Pharma Gx company Monoclonal antibody development aimed for global markets, including US, EU and
Slide 34: Unique competitive edge with GLP-1 is a significant factor for future success
Unique competitive edge with GLP-1 is a significant factor for future success while the biologics business has also picked up ▷ From a low base in FY20, we have added several new customers after receiving USFDA approval in FY23 (Two inspections included in CY2022- PAI, Drug Device, and GMP) ~$31m ~$
Slide 35: OneSource in a sweet spot to capitalize on GLP-1 opportunities
OneSource in a sweet spot to capitalize on the upcoming GLP-1 opportunities 2022 2023 2024 2025 2026 2027 2028 Semaglutide • Sold as Ozempic® (diabetes) and Wegovy ® (Weight loss/obesity) • Stelis is partnered with multiple players including 2 with NCE-1 filings in US 26,338 25,817 • Stelis has stra
Slide 36: Stelis poised to gain significant value from the GLP-1 growth story
With access through own JVs & CDMO partners, including two first-to-files, Stelis poised to gain significant value from the GLP-1 growth story Semaglutide Liraglutide Tirzepatide CDMO Partnered CDMO CDMO CDMO Partnered CDMO • Leading Indian • Licensed to global top 3 Generic player 1st to • 6 custom
Slide 37: Growth lever 2: Soft Gelatin Capsules
Growth lever 2 : Soft Gelatin Capsules One of the leading global players in soft gelatin technologies with a strong funnel of opportunities and a robust partner led Rx-penetration 36
Slide 38: The global soft gelatin market is continuously expanding
The global soft gelatin market is continuously expanding, and the introduction of new products is driving demand for CDMO services. We are amongst the top 5 players globally in SGCs US is the largest market and a significant growth pick up is led by the EU and ROW regions Region Market size (bn$) Vo
Slide 39: Soft Gelatin Platform delivering 15 ANDAs with Pharmagel collaboration
In technical collaboration with Pharmagel, Italy, our Soft Gelatin Platform under One-Source has been successful in delivering 15 ANDAs, with over 15 years of cumulative Rx soft gel experience. Our Capabilities for a strong B2B or a CDMO led strategy • All products developed and manufactured with Gl
Slide 40: Amongst the Top 5 Players globally in SGCs
Amongst the Top 5 Player globally in SGCs with a sizeable presence and a strong pipeline of products to further augment the CDMO business Strong funnel of opportunities and a robust partner led Rx-penetration Facility based in Bangalore Regulatory approvals: US-FDA, MHRA, ANVISA, TGA, WHO & MCC $11.
Slide 41: Growth lever 3: Complex and Specialty Injectables
Growth lever 3 : Complex and Specialty Injectables Significant experience in injectables with wide capabilities makes us a very strong CDMO player for complex and ready to use products 40
Slide 42: Long-term fundamentals for small molecule complex injectables CDMO remain intact
The long-term fundamentals for small molecule complex injectables CDMO opportunities remain intact as more products lose exclusivity and high complexity of products elevates the barrier to entry for new players. Generic injectables are increasingly considered the next Brands LOE by route of administ
Slide 43: Current injectables environment presents opportunity for new players
The current environment in injectables presents opportunity for new players that can scale with capabilities SEVERE INJECTABLE SHORTAGES PERSISTING – HITTING A 10-YEAR HIGH – MA JOR LACK OF SUPPLY RELIABILITY OPPORTUNITY FOR EMERGING PLAYERS THAT HAVE ABILITY TO INCREASED SCRUTINY FROM REGULATORS ON
Slide 44: One of the largest platforms for sterile injectables
One of the largest platform for sterile injectables with strong capabilities across dosage formats ▸ State-of-the-art USFDA approved facility offers a wide range of parenteral drug D O S A G E F O R M AT S products with over two decades of experience supplying to the US, Europe and Bengaluru, Site 1
Slide 45: Building a global CDMO platform with 2 distinct segments
CDMO (One-Source) platform: Building a global CDMO platform with 2 distinct segments - high margin IP-led CDMO business; & a tactical CMO business (used to ensure efficient capacity utilization) IP-led CDMO Pure-play CMO • In-house development of ANDAs on behalf of the partners, • CMO contracts with
Slide 46: Over $200m invested to build end-to-end integrated service offering
We have invested over $200m investments to build end-to-end fully integrated service offering, along with the capacity and agility to handle almost any level of client demand. 45
Slide 47: One-Source will target a global opportunity with industry-leading multiples
One-Source will target a global opportunity with very few players that attract industry- leading multiples Trends in CDMOs Leading Global players and their valuations Flexible CDMOs support pharmaceutical companies at all stages of Segment API FDF Biologics Revenue Market Cap EV/EBITDA the process o
Slide 48: Thank You
Thank You 47
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