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Taro Pharmaceutical Industries Ltd. Message Board

  • imho_dyodd imho_dyodd Feb 28, 2013 8:15 PM Flag

    Mylan Buys India's Strides Generic Pharma Injectibles business for 19 times EBITDA

    Injectables generic business has the same characteristics as Dermatology generic business:

    1. "Niche-ness" / difficult to make compared to generic pills
    2. "Low competition" . Lot of competitor issues due to FDA's stringent standards and enforcement
    The average number of competitors per drug in these 2 sectors are much lower compared to generic pharma pill business.

    In fact I would argue Dermatology generic business deserves higher valuation:

    Because of the extremely low competition from India in generic dermatology vs generic injectibles. Glenmark is the ONLY major competitor from India and it has only 19 products in dermatology area. Remember competition from India is extremely deflationary to pricing as manufacturing cost in India is very low. See Sagent pharma ceo's interview on this...Sagent is trying to compete in generic injectables business by doing deals with India's generic injectible makers like Strides and Zydus.

    if TARO were sold for 20 times recent quarter's annualized EBITDA , its valuation would be around $200 per share.

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    • let me put a disclaimer for new investors. do NOT invest based on my recommendation or other people's recommendations in message boards.

      "I am long TARO. This is NOT a recommendation to buy any security. I strongly recommend any new investor to look at all TARO SEC filings and do your own research on market valuation, corp governance, legal recourse, before considering any investment in TARO. plus, i am making forward looking statements and assumptions which may turn out to be incorrect."

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