Alembic Pharma sees domestic business growing in double digits this fiscal

Alembic Pharmaceuticals is looking at enhancing profitability of its domestic business and expects it to grow in double digits in the current financial year with focus on high-margin products, according to the company's annual report for 2019-20.

Sharing information with the company's shareholders, the drug firm said it has already started witnessing an uptick in domestic business with new product strategy in place.

"We completed this transition in 2019-20 and started witnessing an uptick in performance in the last quarter of the fiscal," Alembic Pharmaceuticals Managing Directors Pranav Amin and Shaunak Amin said in a joint communication.

The company aims to grow its presence in the specialty and chronic therapy segments, they added.

"In 2020-21, we expect (domestic) business to grow in double digits in sync with the growth in the market," the company leaders noted.

Strong brand recall, an efficient sales force, a growing network of supportive doctors and timely product launches are the key catalysts for this business, they added.

In 2019-20, the company's revenues from domestic business stood at Rs 1,425 crore, a growth of 3 per cent over Rs 1,382 crore in 2018-19, and accounted for 31 per cent of the company's overall revenues that stood at Rs 4,606 crore.

The company's international generics business, on the other hand, accounted for 54 per cent of its overall revenues in 2019-20.

The segment saw a revenue growth of 39 per cent to Rs 2,473 crore in 2019-20.

The revenue from the US market, a major part of the business, stood at Rs 1,976 crore in the previous financial year, a growth of 53 per cent as compared with 2018-19.

Besides, revenues from other international markets remained flat at Rs 497 crore.

"Our agile and nimble supply chain clubbed with proactive front-end marketing helped us lead growth in the US market. Our ability to deliver high-quality products in the required quantities, in a timely manner as per the customers' convenience differentiated us from our peers," the managing directors noted.

With an accelerated pace of new product launches as well as ANDA filing, the company is confident of sustaining this momentum in the future, they added.

The Gujarat-based firm said it incurred a capital expenditure (capex) of Rs 697 crore in the last financial year and expects to invest around the same capital this year as well.

"With this, a large part of the capital expenditure is behind us. In 2020-21, our capex is likely to peak out at Rs 700 crore per annum and from 2021-22 will normalise to Rs 300-350 crore," it added.

The company is investing in capacity expansion at existing plants as well as in setting up new manufacturing facilities.

"Post this capacity expansion, we will have enhanced new dosage offerings and will be able to cater to the strong demand in the US generics segment," the drug maker said.

Benefits from these expansions are likely to start from 2021-22, it added.

"Our focus is on ramping up filings across ophthalmology, general injectables, oncology injectables and oral solids," the company said.

The company has three research and development (R&D) facilities in Vadodara, Hyderabad and the US. According to its website, the company has six formulation and three active pharmaceutical ingredient (API) manufacturing facilities.

Five formulation production units are located near Vadodara in Gujarat -- three at Panelav and two at Karakhadi. This apart, one facility is located in Sikkim.

The company currently manufactures general oral solids in Panelav and is in the process of putting up oncology oral solids and oncology injectable facilities at the same location.

Besides, two API manufacturing plants located at Panelav and one at Karakhadi.