Kopran Limited is a 30 years old integrated Pharmaceutical Company engaged in manufacturing and supplying International Quality Formulations and APIs worldwide. Company in Dec 2021 secured patent for 20 years for the active pharmaceutical ingredient (API) product Nitroxoline.

KOPRAN LIMITED

Introduction

CURRENT MARKET PRICE ON THE DATE OF PUBLISHING THIS REPORT-: 252 RS

Kopran, managed by Parijat Enterprises and promoted by the Somani group, issued a public offering in 1992 to fund a backward integration project to create drug intermediates for semi-synthetic pharmaceuticals, as well as to expand its antibiotic plant.

Kopran produces and sells electronic equipment as well as pharmaceutical final dosage forms and bulk pharmaceuticals. It produces semi-synthetic penicillin and is one of the world’s top amoxycillin manufacturers. Kopran also produces penicillin-G acylase, a fermentation-based enzyme. It has technological partnerships with Gesellschaft Fur Biotechnologische Forschung in Germany, Yuhan Corporation in South Korea, Ciba Corning Diagnostic in the United States, and Adac Laboratories in the United States.

Kopran’s bulk pharmaceutical facility has been approved by the US FDA and UK regulatory agencies. In 1995, the Indian Drug Manufacturers Association bestowed the Quality Excellence Award on the company. Kopran’s high export growth rate has been acknowledged by a number of awards from CHEMEXCIL and the Ministry of Commerce.

Over the years, Kopran has released a number of items, including in 2001, where the company partnered with E-Merck to co-market Rofecoxib, a novel anti-inflammatory medicine. Rofecoxib is a non-steroid anti-inflammatory medication (NSAID) that was recently introduced to the international market. Cholestat (Atorvastatin, a cholesterol-lowering drug) was also released, and E-Merck was given co-marketing rights for Atorvastatin (India). Aside from that, in 2003, the firm introduced new goods in therapeutic categories such as asthma, cardiology, diabetes, and lifestyle items.

Today Kopran exports to more than 50 countries across the globe.

Business / Products

Formulations

Formulation offers approximately 100 dosage forms, including tablets, capsules, dry powder, suspension, and injectables, to meet the demands of international markets. Many of the APIs are manufactured in-house, giving branded and generic formulations a competitive advantage.

Kopran has more than 428 Product approvals in 46 countries including 10 registrations / product approvals (Amlodipine Tabs, Omeprazole Caps, Azithromycin Caps, Albendazole Tabs, Flucloxacillin, Erythromycin Tabs, Ibuprofen Tabs, Ceftriaxone Inj. & Amoxycillin range) in South Africa.

Company has dedicated manufacturing plants for:

• Penicillin based Finished Dosage Forms with an annual capacity of 1500 million Capsules, 20 million bottles Dry Syrup and 500 million Tablets.
• Non-Penicillin based Finished Dosage Forms with an annual capacity of 2000 million Tablets (Uncoated), 1000 million Tablets (Coated) and 500 million Capsules.

API

Kopran manufactures a range of APIs, including Sterile Cephalosporins and Carbapenems, in its state of the art facility. Manufacturing of Sterile API needs excellent facility and quality systems. Kopran has been a major player in the manufacturing of Sterile Cephalosporins and Carbapenems. Company also offers Macrolide, Antibacterial, Anticonvulsant and Cardiovascular range of drugs. It holds Certificate of Suitability and Drug Master File for many of its APIs.

The plant has been approved by US FDA, EU GMP, WHO GMP & KFDA. The facility has plants for manufacturing products such as Atenolol, Pregabalin , Cephalosporins, Carbapenems – Non-Sterile & Sterile, Macrolides, Antibacterials & Other APIs.

Company has following products which have been filed for registration with USFDA: Pregabalin, Azithromycin, Metaprolol Tartarate, Metaprolol Succinate & Nitroxoline Dossier which has been approved by German Drug Authority and has been filed in 15 EU Countries.

Capex 

In 2021 Kopran had made a capex commitment of about 80 crores to be utilised for Completed upgradation and expansion of Mahad facility, upgradation and expansion of Solvent Recovery Plant as well as the expansion of Non-Sterile plant undertaken by the Company which was to be completed by end of January 2022.

Patent for Api Product

The Indian Patent office had granted Process Patent No. IN384085 for 20 years to Kopran Research Laboratories, a wholly-owned subsidiary of Kopran, for the active pharmaceutical ingredient (API) product Nitroxoline, for the invention titled “Improved, Cost Effective Process For Producing Nitroxoline”.

Nitroxoline is an antibiotic that has been in use in Europe for about fifty years, and has proven to be very effective at combating biofilm infections. For more information please check online.

Financials

For Q3FY22, December 2021

• Net Sales stood at Rs 131.80 crore in December 2021 up 13.54% from Rs. 116.08 crore in December 2020.
• Quarterly Net Profit stood at Rs. 20.07 crore in December 2021 up 27.76% from Rs. 15.71 crore in December 2020.
• EBITDA stood at Rs. 31.30 crore in December 2021 up 23.37% from Rs. 25.37 crore in December 2020.
• Kopran EPS had increased to Rs. 4.64 in December 2021 from Rs. 3.63 in December 2020.

Q4 FY 22 results are awaited. It is suggested to invest only partially in this stock if you choose to invest and wait till the q4 results are out before being fully invested.

Going forward

Kopran is expecting to file 8 DMF’s (Drug Master Files) FY 22-23 of which 4 products will be filled in Q1 FY 22-23 and 4 products to be filled in Q2 FY 22-23.

Other than that Kopran commercialised 2 products in FY H1 2021-22 & completed R&D of 2 products in H1 FY 2021-22.

Going forward company plans to expand its presence by growing Into New Markets such as French, West Africa, South-East Asia and few Latin American markets which are the focus countries for expanding presence and are at the forefront of formulation business.

Company currently has 

• 71- Dossiers filed in Africa & French West Africa region in H1 Fy 2021-22 
• 17- Dossiers filed in South East Asia region in H1 FY 2021-22 
• 51- Dossiers filed in Latin America region in H1 FY 2021-22 

What are Dossiers?

Regulatory dossier is a package of documents, which may include all required information regarding newly developed drug products and/or generics, which is required by EU and US regulatory authorities for granting marketing authorization approvals. The main information that is included in the package is administrative information, data related to the quality, safety and efficacy of drug product, which can be submitted by CTD (Common Technical Document) format both paper and electronic version. Since the information submitted in paper format was enormous, agencies are now encouraging applications to be submitted in eCTD format.

Conclusion

Kopran Limited is an 30 years old integrated Pharmaceutical Company engaged in manufacturing and supplying International Quality Formulations and APIs having negligible amount of debt of 66 crores on the balance sheet with the significant amount current work in process over the last few years. Thus it can be said that the company has been expanding rapidly where compounded sales over 3 &  5 year period increased by 11% & 16% with the net profit increasing by almost 40% over the same period (Compounded). Thus going forward if this margins are sustained it can increase the profitability of the company by a large amount. However the stock in past 2-3 years has increased dramatically which is around 10x from the price in 2020. Therefore in short term there can be some consolidation which can extend to a period of at least 6-8 months as in very short span of just 3-5 months stock has fallen 35%. So it may be a while before the stock starts its upward trajectory. Thus it is worth keeping on the watch list for now.