Daily Brief Health Care: Ajanta Pharma, Beijing Yuanxin Technology Group Co Ltd, Viatris and more

In today’s briefing:

Ajanta Pharma (AJP IN): Starts FY24 With Healthy Branded Generics Growth and Improving Margins
Pre-IPO Beijing Yuanxin Technology Group – Some Points Worth the Attention
Viatris Inc.: Unveiling the Power of Popular Brands like Lipitor and Lyrica! – Major Drivers

Ajanta Pharma (AJP IN): Starts FY24 With Healthy Branded Generics Growth and Improving Margins

Ajanta Pharma (AJP IN) reported better-than-expected profitability in Q1FY24, due to softening of raw material prices and normalization of freight rates. EBITDA margin expanded 300bps YoY to 26%.
Revenue increased 7% YoY to INR10B, driven by superior execution in branded generics business and lesser price erosion in the U.S. 73% of the total sales came from branded generic.
Management maintained mid-teen revenue growth and EBITDA margin guidance of ~25% for FY24. Ajanta Pharma has a positive business outlook due to growing branded generic business and niche U.S. launches.

Yuanxin’s financial performance has not improved and it is still in a state of continuous loss. At such low gross margin level, Yuanxin will find it difficult to make money.
As China’s retail pharmacy market has entered a new era of integration as the industry growth is slowing down, the challenges Yuanxin has to face would be different from before.
When the market pattern has been basically determined, Yuanxin has little chance to break through. Being acquired may be a better outcome. If IPO, valuation would be lower than peers.

Viatris Inc. delivered mixed results for the previous quarter, with revenues above the analyst consensus.
The company exceeded its expectations in the quarter, delivering total revenues of $3.9 billion, or about 2% year-over-year growth on an operational adjusted basis, as well as adjusted EBITDA of $1.3 billion and free cash flow of $447 million.
Tyrvaya’s bridge program was improved during the quarter to boost value per script and produce the greatest quarterly TRx launch.

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