- Revenues are flat and profitability is down because of the high base effect. Q3 and Q4 of FY21 were phenomenal quarters for the company because there was a major poultry disease outbreak which led to increased demand for vaccines.
- They also have additional income every year from licensing fees which is not there in Q3 FY22.
- They have been working on 3 vaccines – classical swine fever, lumpy skin disease and sheep pox vaccine. All these vaccines are in the final stages of quality testing and regulatory approval and they hope to launch them in Q1 FY23. The technology to manufacture these vaccines has been bought from the Indian Veterinary Research Institute.
- They won a tender issued by the Government of India for the supply of PPR vaccine. The total quantity is 20 crore doses in 2 years. The sale price is a little over ₹1, it will be contributing ₹20-25 Cr to revenues over a 2 year period.
- They are adding new products, manpower and territories to the animal health division. They are expecting it to grow faster than the vaccine business as it has a low base and the market for health products is much bigger than the market for vaccines.
- Currently, they are working on 2 capacity enhancement projects – first one is increasing their capacity for the bulk antigen and the second one is increasing the capacity for fill finish for the finished vaccines. They are both expected to be operational by the end of Q4 and will increase the capacity by 100% for the vaccines they are already manufacturing.
- Hester Africa has received the license for manufacturing. They finished the final inspection a few days ago and have been informally told that they will be allowed to start marketing products.
- They are starting with 3 vaccines in the facility – first one is the PPR Vaccine – Nigerian Strain that is used in Africa, second is the Newcastle Disease Vaccine for poultry and the third is the CBPV which is the Contagious Bovine Pleuropneumonia Vaccine.
- The World Animal Health Organization put out a tender to create a vaccine bank for the PPR vaccine. The tender has been won by 2 players – Hester and a Moroccan company. The supplies were supposed to start this quarter but have been delayed.
- They are launching a pet division in India. They will be starting with healthcare products and then move into vaccines. They will be launching the first product by the end of next quarter.
- The Bharat biotech COVAXIN project is being delayed due to delay in shipments of equipment from Europe. They are estimating that trial production will start from April-May. They will be able to supply 70 lakh doses of the vaccine from the facility. The estimated cost of the facility is about ₹60-70 Cr.
- The margin on vaccines is higher than the margin on health products. So as the revenues from health products grow, margins are expected to decline.