Target: ₹2,500
CMP: ₹2,091.50
The company has informed that it has sought approval from the US FDA and the European Medicines Agency (EMA) for an additional mHSPC treatment using Nubeqa in combination with ADT. This opens up a new treatment option for the drug
Given the combination is already approved in 80+ markets around the world, the US and EU market approvals should come soon, in our view. This is likely to contribute additional Nubeqa sales for Bayer. Its previous peak Nubeqa annual sales estimate of €3 billion by CY30 indicates an average quarterly growth rate of just about 2.5 per cent. Given that Nubeqa sales have already reached €417 million quarterly run-rate by end-Q2FY25, the estimate, in our view, is very low
Considering a modest 5 per cent quarterly growth rate, Bayer could achieve €3-billion target by CY27 or sooner if the growth rate is higher. Hence, going forward, demand for the Nubeqa intermediate supplies would remain buoyant for Ami. Additionally, a new CDMO contract by end-FY25, with significant revenue from FY26, would drive revenue growth, more than offsetting any dip in sales due to delay in electrolyte additives and weakness in Baba Fine Chem.
Further, rising contribution from the high-margin CDMO supplies business could expand EBITDA margin to about 25 per cent by FY27.
