Piramal Pharma has a blockbuster win in CDMO. Target price is ₹313

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Ravi
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Piramal Pharma has a blockbuster win in CDMO. Target price is ₹313

Post by Ravi »

Piramal Pharma Solutions (PPS), the CDMO arm of Piramal Pharma, has announced a multi million-dollar investment in partnership with NewAmsterdam Pharma to establish a dedicated Oral Solid Dosage (OSD) suite at its Sellersville, Pennsylvania facility. The new suite will support the commercial production of NewAmsterdam’s fixed dose combination (FDC) of Obicetrapib and Ezetimibe, significantly enhancing Piramal’s global OSD capabilities while reinforcing its integrated US–India network and long-term growth visibility. The products are currently in filing stage, with launch likely in FY27. Further, the tie-up is likely to improve the US business profitability as the products are expected to carry high margin. To accommodate the partnership, we have revised our FY27 and FY28 estimates upwards, with EBITDA in both the years being increased by 4% and 7%, respectively. We continue to value the company using SOTP methodology, valuing the segmental June’27 EBITDA at the same multiples, to arrive at an updated June’26 TP of INR 313.

 About the products: Obicetrapib is a novel, oral, low-dose CETP inhibitor being developed by NewAmsterdam Pharma to address the limitations of existing LDL-C lowering therapies. In multiple Phase 2 and 3 trials, it has shown significant reductions in LDL cholesterol with a placebo-like safety profile. When combined with Ezetimibe, a widely used cholesterol absorption inhibitor, the fixed dose combination (FDC) offers a potent, non-statin alternative for patients at risk of cardiovascular disease who are not adequately managed by current treatments. The product has market potential of USD 1-2bn.

 Long standing partnership: The partnership between the two entities goes beyond the new Sellersville OSD suite. Piramal’s integrated global network has already supported Obicetrapib’s development, with its Ahmedabad site playing a critical role in formulation work and the Pithampur site providing dual sourcing to ensure supply chain resilience. This reflects a long-standing, collaborative relationship where Piramal has acted not just as a manufacturer but as a strategic development partner, enabling NewAmsterdam to advance Obicetrapib efficiently toward commercialization.

 Financial implication: Piramal is likely to be the exclusive supplier as the partnership entails two facilities for the formulations. Further, the project will enhance the US business profitability as the margins are expected to be upwards of 30%. The contributions from the tie-up are expected to materialize from FY27 onwards and have USD 50-100mn annual top-line potential for the first three years. Thus, we expect an additional INR 2.6bn/5.1bn in revenue for FY27E/FY28E and an incremental INR 0.9bn/1.8bn EBITDA for the company over same horizon. This represents a revenue estimate revision of +2%/+4% and EBITDA estimate revision of +4%/+7% over FY27E/28E. Further, the FY27E/FY28E estimates of net profit has been revised by +8%/+12%. Thus, valuing the segments at the same multiple in SOTP methodology, we arrive at June’26 TP of INR 313.

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