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Taro Pharmaceutical Industries Ltd. Message Board

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  • The Danger is very real now. Hoping it never ever comes.

    trades at huge discount on ev/ebitda multiples to perrigo and actavis....

  • did bluemountain find out who owns those bbh shares (the pr from almost a year ago before independent director elections)?

  • Danger – if Taro’s price lingers around 140’s for few weeks, Taro mgmt may use it as a pretext to claim that this is the market value of Taro and will submit a buy buyout offer @165. It happened before when Taro reached about $24, then slid down to $19.5, stayed there for a while and then came the $24.5 offer.
    Without being a trading forensic expert, one can tell that the trading patterns smell- manipulations. That is why the stock is recently moving a few pennies either way, and is knocked down when it breaks upward of the “permitted” range. Notice also, the pattern in the beginning of the trading day and in the end.
    I guess the window of opportunity for Taro to offer a buyout, depends on the results of the December Q. If it will be strong (and Taro knows about it well ahead of time) expect the buyout offer before the Dec. Q announcement (around 8-12 Feb 2015), if it is not, then Taro will expect a further drop in Taro’s price, and opportunistic as they are, the buyout offer will be lowered. Some thoughts.

  • Reply to

    Can somebody reconciliation this?

    by moydegem Dec 4, 2014 1:00 PM

    is it doubling sales in NA or doubling capacity in Brampton plant ? Majority of its products are made in Haifa bay. We don't know what percent of sales comes from products in Brampton plant.

    Indeed not providing guidance has put a lid on price rise....however, the super low valuation relative to high ev to ebitda multiples of perrigo and actavis is a mystery as far as i am concerned. could there be price manipulation ?

  • On one side, Taro is investing $250M (?) in its plant in Canada in anticipation of doubling its sales in North America. On the other side, Kal-Dilip said that the opportunistic pricing and high margins will inevitably bring in more competition (Kal: “Laws of economic”), implying a drop in volume. If this is true then why invest $250 in a plant expansion if volume is expected to drop?

  • Reply to

    Drop

    by driver_ch Nov 25, 2014 11:06 AM

    SEC should investigate who are the buyers and who are the sellers over the last few weeks when price has been taken down from 160 to 140. you could go to sec web site and ask them

  • ...dead money?

  • similar product in licensed by SUn pharma (not Taro )

  • On Thursday, Novartis ($NVS) won European approval for its injectable Xolair to treat chronic hives--the first such product cleared there for patients who don't respond to antihistamines alone. Sales of the drug for this condition, called chronic spontaneous urticaria (CSU), could add as much as $500 million a year to the $613 million Xolair is already brings in for asthma--and Novartis predicts it will help launch the company into a leading position in dermatology.

    David Epstein, division head of Novartis Pharmaceuticals, told analysts at a Cowen & Co. healthcare conference earlier this week that dermatology represents a $2 billion to $3 billion opportunity for Novartis, with high margins to boot, according to PMLive. That's because in addition to Xolair's potential in treating CSU, Novartis has high hopes for secukinumab, the psoriasis treatment that aced its Phase III trials and will be contending for regulatory approvals this year.

    The Swiss drug giant is now in a close race with Amgen ($AMGN) and AstraZeneca ($AZN), which are co-developing a psoriasis treatment, brodalumab, that has also shown promise in late-stage trials. Both drugs work by inhibiting interleukin-17, a cytokine that has been implicated in psoriasis and other autoimmune diseases.

  • Reply to

    taro is trading at 50% discount

    by imho_dyodd Nov 21, 2014 11:15 AM

    Dead wrong probably. Just wanted to highlight another generic co trading at similar multiples. Thanks for the mention in your comment, did not know that one. Management seems more investors friendly than TARO SUN.

    Anyway a shame that it does not trade at 200-250 right now, but means that there is a good margin of safety and you can add to your position... Anyway, still up 40 % 50%since the last buyback last year. So pretty good returns,

    If they keep on getting super results like september quarter, well, we will see a price meaningfully higher. Will they do another buyback ? Maybe. Would be a good use of their cash. And good deal for SUN as it fuels their PPS as they consolidate Taro results and trade at much higher PE. Either that, or SUN tries to buy again. Whatever, more good things can happen in the not so distant future.

    Novexatin might be good but the market is littered with biotechs that have so call super products and failed to meet the end point of their trials. Main point is that if I wanted a biotech, i would invest in one. Whatever, lets say we have a free option on this product. And if it fails, well, it would probably have no impact on TARO pps. What type of value would you give it anyway ?

    Staying long and if i had more guts, would add some at this level.

    Regards,

  • Reply to

    taro is trading at 50% discount

    by imho_dyodd Nov 21, 2014 11:15 AM

    you are dead wrong to compare LCI and Taro. First it appears LCI is predominantly capsules,tablets.
    Second, LCI has very few products in its portfolio. They have a much higher risk : Entry of market competition (capsules), Not much opportunity of price hikes with the few products they have in their portfolio. Remember over the last 4 years that is the thesis of taro. they have been finding 1 product or the other for price hikes in their 180 products. if one takes a slack, they have been finding another and this story will continue as pipeline launches happen.

    Also, pipeline launches start from 2016. You cannot ignore the value of Novexatin...it is addressing 6billion market and so far the data has shown to be very competitive relative to other drugs in the market

    Its a shame taro trades lower than $200 for its fundamentals.

  • Reply to

    taro is trading at 50% discount

    by imho_dyodd Nov 21, 2014 11:15 AM

    You brought LCI as a comparative. They have been going down also. Actually, if you take annualized their last quarter .96/share, you get 3.84/annum EPS. Deduct the cash on their balance sheet $ 4/5 per share and their current price of 45 something and you get multiples that are not very different than TARO. Still different mix of products but valuation seems similar.

    Novexation : not that interesting until it comes to market. Europe ? potential but they would not benefit from the FDA "protection" Whatever, not there yet.

    So this leaves us with the new ANDAs that will come to the market in the next year, the possibility of future price increase and how long these price increase will stick around. 2016 was mentionned on the LCI confernece call. Minus SUN being the owner.

    So is it still a good investment ?

    Think so. However, if prices shoudl decrease (or if the market start discounting price decrease) this one could go lower.

    Regards,

  • Reply to

    taro is trading at 50% discount

    by imho_dyodd Nov 21, 2014 11:15 AM

    the stock price is becoming very convenient for a buyback?

  • can anybody explain why this is trading at $140? At 18 times(the agila multiple) annualized most recent quarter ebitda the stock price should be $280. Assuming ttm ebitda and applying 18 times we still get $215.

    market is discounting novexatin and european market value for taro's portfolio.

  • Reply to

    Sun Pharma Q2 FY15 Call Transcript

    by doodhaa Nov 19, 2014 6:05 PM

    so?

  • Surya Patra: Just a clarification, the observation regards to Taro numbers is that, the second quarter
    and third quarter normally are the strongest contributor and even the margin profile during these
    quarters are much better than the other two. So whether any cyclicality is there in that business or that
    is a period when normally they take the price hike?
    Dilip S. Shanghvi: I do not think we have studied at a level of granularity, but general concept in US
    is that because of the holidays, the wholesalers are not sure as to normal operations for first one to two
    weeks, so people buy slightly larger quantity at the end of the year in December.

    Sentiment: Hold

  • nice volume in the first 90 min - 154K, mostly because of one big transaction
    NLS Time (ET) NLS Price NLS Share Volume
    10:25:13 $ 148.25 99,500

    Sentiment: Buy

  • Reply to

    Undervaluation

    by imho_dyodd Nov 17, 2014 11:39 AM

    Even using only $464m as the sustainable ebitda (q3 annualized is $656m) and applying the precedent comparable transaction multiple of Agila-Mylan transaction of Ev to Ebitda of 18, we get a value of $212 per share. Don;t understand why it trades at $147 per share.

    But i have a feeling that price hikes will sustain at least for 2-3 years (well, i am human and i could be wrong). As we have noticed in the past even when competition reenters , they reenter with taro's new price. there is a reason for this and it is explained well in Lannet's most recent quarterly conference call. I encourage investors to listen to it. Plus getting new supply will likely require site approvals and such ...and much longer FDA wait.

    Also, notice pipeline launches in 2016, 2017 are good.

    Also, the thesis that has been validated in the last few years is Taro continues to find product or two for price hikes in its diversified basket. So what if competition enters the ones where they previously took price hikes...they will likely always find a product or two to make up for the slack in the ones where competition has entered after hikes.

    Don't forget the $700m cash and growing.

  • Annualized ebitda 164*4=$656m

    Taro is trading around 8.6 times ebitda (assuming price increase sustains. For other products price increases have sustained in the past). Also listen to Lannet's conf call, they have explained the rational of market players when it comes to price increases. existing players are somewhat tied in terms of how they react to price increase. so they inevitably follow suit .

    A low-competition business like taro normally trades around 15 times ebitda ...see perrigo, actavis,

    So taro continues trading at significant discounts...much to our disappointment.

  • Taro drives Sun’s performance
    November 13, 2014:
    Sun Pharma’s operating profit margin improved by 1.9 per cent to 45.7 per cent in the September quarter, thanks to the strong performance by its subsidiary Taro Pharma. The good showing was despite higher integration and compliance costs pertaining to Ranbaxy acquisition.

    Taro posted a strong 22 per cent growth in revenue for the quarter. Its operating profit margin vaulted to 65.5 per cent in September 2014, from 60.6 per cent during the same period last year. This was helped by upward revision in the prices of select drugs in the US. This more than compensated for the marginal decline in volumes. The benefit from higher drug prices should continue in the December quarter too. Taro has filed for five products so far this year and has received approval for three products.
    Strong performance by Taro more than compensated for the weakness in Sun’s US business due to expiry of exclusivity for Novo Nordisk’s anti-diabetes drug Prandin and lower sales of former’s anti-cancer drug Doxil.

TARO
137.93+3.72(+2.77%)Dec 17 4:03 PMEST

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