Gland Pharma signs agreement with RDIF for the manufacturing of Sputnik V
The injectables manufacturing facility of Gland Pharma has now become a part of the global supply chain of COVID – 19 vaccines. The company has recently agreed with the Russian Direct Investment Fund ( RDIF ) in line with this. Both signed this agreement to supply up to 252 million doses of RDIF’s Sputnik V vaccine. This has also led to a drastic rise in its stock, currently being traded at around 26 times FY23 earnings estimates.
Sputnik V is recorded to have 92 % efficacy against COVID – 19 as per Lancet. This vaccine’s price is also considerably less as it ranges below $ 10 ( less than Rs. 730 ). These reasons have been a big confidence booster to many. 
Analysts at Haitong Securities India Pvt. Ltd. claimed that the total opportunity size brought out by this vaccine varies. It could be in the range of Rs. 800 to Rs. 1700 crore depending on the price ( Rs. 350 to Rs. 700 per dose ). If the procurement cost per dose in India drops to Rs. 150 – 175, this size will shrink to over Rs. 400 crore.
The vaccine production will begin from 3QFY21, while delivery could start from 4QFY21. The countries to which Gland Pharma will be distributing the vaccines are yet to be disclosed. The company has also not specified any timeline for executing the contract.
The manufacturing capabilities
Despite the agreement being positive, analysts are vigilant over the company’s available vacant capacities for vaccine manufacturing. Inclusion of the drug substance’s manufacturing in the agreement is believed to bring uncertainty in this agreement. Analysts at Haitong have expressed these views by further adding that the company is yet to disclose the Capex requirements. They claim that the company has only around 40 million vials capacity vacant. The company’s management mentioned this information during the 3QFY21 investor’s call. The company’s earnings estimates have also been kept unchanged until further clarification from the company.
Gland Pharma’s unique B2B business model is a positive aspect of the company. This enables it to grow its market share and also maintain cost leadership through economies of scale. The company’s facilities are also in line with the manufacturing norms set by the USFDA.
Experts believe this pharma major to be an ideal pick for long–term investment owing to many reasons. Strong domain expertise, robust growth prospects, sturdy and consistent earning track records, and a healthy return ratio are some of the reasons for this.
- 1. the Fiscal year 2023
- 2. 3rd quarter of the Fiscal year 2021
- 3. 4th quarter of the Fiscal year 2021
- 4. Business – to – Business
- 5. United States Food and Drug Administration
Read more: COVID Vaccination Program in India
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