[ad_1]
Lupin, a prominent pharmaceutical company, is considering a restructuring move to unlock value by demerging its API (active pharmaceutical ingredients) business, as revealed by industry sources. This strategic decision follows in the footsteps of Lupin’s peer, Glenmark Pharma, which successfully spun off its API business into a separate entity named Glenmark Life Sciences in May 2019. The market debut of Glenmark Life Sciences took place in August 2021. Lupin’s stock has experienced a notable increase of over 24 percent in the past three months.
Lupin, a prominent pharmaceutical company, is considering a restructuring move to unlock value by demerging its API (active pharmaceutical ingredients) business, as revealed by industry sources. This strategic decision follows in the footsteps of Lupin’s peer, Glenmark Pharma, which successfully spun off its API business into a separate entity named Glenmark Life Sciences in May 2019. The market debut of Glenmark Life Sciences took place in August 2021. Lupin’s stock has experienced a notable increase of over 24 percent in the past three months.
The surge in Lupin’s trade can be attributed to the recent approval from the US FDA for their key respiratory drug, gSpiriva. With the API business showing signs of revival, Lupin is now contemplating an internal restructuring exercise. The company aims to carve out its API vertical to unlock its potential value. The specifics of this demerger, such as a potential listing or stake sale of the separated entity, are yet to be determined. Discussions regarding the demerger option are currently underway at an advanced stage, although it is uncertain if these talks will ultimately result in a transaction.
The surge in Lupin’s trade can be attributed to the recent approval from the US FDA for their key respiratory drug, gSpiriva. With the API business showing signs of revival, Lupin is now contemplating an internal restructuring exercise. The company aims to carve out its API vertical to unlock its potential value. The specifics of this demerger, such as a potential listing or stake sale of the separated entity, are yet to be determined. Discussions regarding the demerger option are currently underway at an advanced stage, although it is uncertain if these talks will ultimately result in a transaction.
These details were shared by anonymous sources who spoke to Moneycontrol. When approached for comment, a Lupin spokesperson responded by stating that the company consistently evaluates strategic options to create value for stakeholders, without directly addressing the market speculation. The spokesperson affirmed Lupin’s commitment to focus on core business areas while exploring opportunities for growth and expansion.
These details were shared by anonymous sources who spoke to Moneycontrol. When approached for comment, a Lupin spokesperson responded by stating that the company consistently evaluates strategic options to create value for stakeholders, without directly addressing the market speculation. The spokesperson affirmed Lupin’s commitment to focus on core business areas while exploring opportunities for growth and expansion.
Lupin’s decision to explore the demerger of its API business mirrors Glenmark Pharma’s earlier move. Currently, Glenmark Life Sciences is undergoing a sale process as its parent company aims to reduce debt. In a report published on May 23, Moneycontrol disclosed that several entities, including Blackstone, KKR, BPEA EQT, PAG, and the Nirma Group, expressed interest in acquiring a controlling stake in Glenmark Lifesciences.
Lupin’s decision to explore the demerger of its API business mirrors Glenmark Pharma’s earlier move. Currently, Glenmark Life Sciences is undergoing a sale process as its parent company aims to reduce debt. In a report published on May 23, Moneycontrol disclosed that several entities, including Blackstone, KKR, BPEA EQT, PAG, and the Nirma Group, expressed interest in acquiring a controlling stake in Glenmark Lifesciences.
During Lupin’s Q4 FY23 earnings conference call, Vinita Gupta, the company’s CEO, highlighted the resurgence of their API business. Gupta mentioned the double-digit growth in India, improved performance in the US market, and the quarter’s demand growth for core products. Ramesh Swaminathan, ED and Global CFO, added that API business sales had grown by 14.6 percent quarter-on-quarter, with a notable year-on-year growth of 46.4 percent attributed to the recovery in core Cephalosporin API sales, particularly in Cefaclor and 7-ACCA.
During Lupin’s Q4 FY23 earnings conference call, Vinita Gupta, the company’s CEO, highlighted the resurgence of their API business. Gupta mentioned the double-digit growth in India, improved performance in the US market, and the quarter’s demand growth for core products. Ramesh Swaminathan, ED and Global CFO, added that API business sales had grown by 14.6 percent quarter-on-quarter, with a notable year-on-year growth of 46.4 percent attributed to the recovery in core Cephalosporin API sales, particularly in Cefaclor and 7-ACCA.
Sanjay Singh, Partner, Head of India, and Co-Head of Asia Healthcare, commented on recent trends in the API segment. He stated that API businesses had faced challenges in the past few quarters due to COVID-related destocking, disruptions in the Chinese supply chain, and price erosion in the US market. However, these factors are gradually easing, and with the Indian government’s emphasis on domestic API manufacturing and global players seeking alternatives to China, the domestic API industry is expected to perform well in FY24 and beyond.
Sanjay Singh, Partner, Head of India, and Co-Head of Asia Healthcare, commented on recent trends in the API segment. He stated that API businesses had faced challenges in the past few quarters due to COVID-related destocking, disruptions in the Chinese supply chain, and price erosion in the US market. However, these factors are gradually easing, and with the Indian government’s emphasis on domestic API manufacturing and global players seeking alternatives to China, the domestic API industry is expected to perform well in FY24 and beyond.
Lupin’s 2022 annual report revealed that the API arm contributed around 6 percent of the company’s total sales, amounting to ₹990 crore. The report outlined Lupin’s efforts to develop a robust portfolio of new API products catering to various therapies. Introducing these new products to different markets is expected to drive sustainable growth in the API business over the next five years. Additionally, the report highlighted the Indian government’s Production-Linked Incentive (PLI) scheme, aimed at achieving self-reliance in the API sector and reducing reliance on imports for key products. Lupin has responded to this initiative by implementing various measures, including expanding API production capacities and introducing new products to its portfolio
Lupin’s 2022 annual report revealed that the API arm contributed around 6 percent of the company’s total sales, amounting to ₹990 crore. The report outlined Lupin’s efforts to develop a robust portfolio of new API products catering to various therapies. Introducing these new products to different markets is expected to drive sustainable growth in the API business over the next five years. Additionally, the report highlighted the Indian government’s Production-Linked Incentive (PLI) scheme, aimed at achieving self-reliance in the API sector and reducing reliance on imports for key products. Lupin has responded to this initiative by implementing various measures, including expanding API production capacities and introducing new products to its portfolio
[ad_2]
Source link