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Panacea Biotec – Weak Q4

June 29, 2008

Panacea Biotec’s Q4 PAT (Rs249mn) was 3% lower than estimates. Revenues were 26% lower than estimates. While gross margin improved significantly by 450bps which reflects the price increase in polio vaccines, EBITDA margin (16.8% vs 18.7% last year) was lower on account of forex loss, and higher than expected personnel and R&D costs. Q4 PAT was saved largely by other income due to reversal of sales tax liability.

Expect Panacea to drive growth in FY09 through pentavalent combination and other vaccines launches. Likely progress on Anthrax vaccine tender award Dec’09, potential M&A activity, launches of IPV vaccine, Pharma NDDS dossier filings.

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