One month ago, Arun Kumar, Founder and Chairman of Strides Pharma, bought Sequent Medical’s 3.7% stake in Strides. At Rs 475 per share, Kumar’s total investment cost was ~A$21m. His investment has already grown to A$30m in value.
Strides’ share price has seen impressive growth over the past two months and its 14% rise last Friday in a flat market and with no recent news certainly caught my attention.
On Monday, Strides “unveiled” Steriscience, its new dedicated arm for sterile injectables. Strides had recently announced that it was putting on hold all new investments, due largely to Covid uncertainties, seemingly sinking previous plans to launch a new sterile injectables venture. But now it says that it will infuse capital into Steriscience. The business will require a total investment of ₹4,000 million (~A74.5m). Approximately A$28m will be debt financed and Strides will contribute ~A$25m for a 54% proportion ownership, while Kumar’s interests (the family office of the promoters) will contribute ~A$21m for the remaining 46% stake. It is expected that the new company will achieve operational break-even within 24 months.
Steriscience is described in Monday’s announcement as “a pure play sterile injectable business…. designed for a global foray…..leveraging the group’s rich experience in the domain”.
With respect to portfolio development the company announcement states
SteriScience has already commenced the development of a compelling portfolio driven by a three-pronged strategy viz. acquired IP with significant cross-market opportunity, in-house development of products and by strategic partnerships with high-quality R&D organizations to in-license late-stage products with a focus on specialty injectables. The Company expects to develop 20+ quick-to-market products and will file its first ANDA within FY21.
The new injectables company will also forge a JV with Indian pharma, Brooks, to carry out manufacturing, marketing and distribution of carbapenems (a particular class of broad spectrum antibiotics) for global markets including the US, Europe, Canada, and Australia. Steriscience will own 56% in the new front-end entity that will be set up. As part of this deal, Brooks will transfer an Indian EU-approved sterile injectables manufacturing facility to the JV on a debt-free basis.
Strides states that the opportunity to create a new niche in generic injectables remains exciting, with the opportunity of a >$400b total market, of which generics represents $70b, and with continuing growth of 13% CAGR. It notes that 60% of the drug shortages in the FDA list are of injectables. The sterile injectables market is said to be operated by 8- 10 players which account for 70% of the revenues.
Steriscience is said to have significant opportunity to "develop, acquire or in-license products with proprietary technologies useful in removing adverse excipients for safer injections, developing easier to administer dosage formats, cold chain management, and increased efficiencies in hospital workflow.”
The Company has partnered with a third-party CDO to in-license late stage developments with a direct technology transfer to the Stelis facility in Bangalore. Tech transfers are to be initiated by Q4CY20 and filings to begin from Q2CY21. Commercialization of this set of products in the US is expected to begin from Q2CY22. There are also said to be “on-going discussions to acquire POCs for two specialty generic products providing a head-start to our specialized portfolio.”
http://www.strides.com/pdf/pressrelease/2020/press_release_20200914(2).pdf
https://economictimes.indiatimes.co...-steriscience-pharma/articleshow/78108991.cms
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