Will complete phase III trial for COVID vaccine in next 2-3 months – Zydus Cadila

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Edited excerpts of an interview with Mr Sharvil Patel, MD, Zydus Group; dated 04th January 2021 from CNBCTV18:

CADILA’s COVID-19 vaccine received a very good response in the second phase trials. The company is now prepared to carry the third phase of the trials in over 60 sites with 30,000 doses, which it expects to complete in the next two-three months, Mr Patel added.

The phase I/ II data have been found to be safe & immunogenic.

They also expect the efficacy results on the COVID-19 vaccine by the first quarter of FY21.

The subject expert committee in India has already given permission to Cadila Healthcare to conduct phase-III clinical trial protocol for the COVID-19 vaccine.

The Company is making sure that they have the manufacturing capacities while they are working on developing the vaccine.

For the last 6-8 months, the Company has been investing large amounts of its capacities in building for the vaccine. They are able to produce around 150 million doses of the vaccine annually.

The Company has partnered with contract manufacturing organisations where they could potentially transfer their technology to produce another additionally 50-70 million doses and that can also be ramped up depending on the requirements.

On funding, Mr Patel said that these activities are all from internal accruals.

On EBITDA, he said that in the current scheme of thing with the current mix of the business that the Company is doing, they are able to maintain their EBITDA levels. The challenge will be in the coming years when things normalise. With the new portfolio that they are adding to both India and US markets, the Company has been working towards at least maintaining those margins and then over a period of next 3 years further improving this.

Consensus Estimate: (Source: market screener website)
The closing price of Cadila Healthcare was ₹ 486/- as of 05-January-2021. It traded at 26x/ 24x/23x the consensus EPS estimate of ₹ 18.5/20.0/21.6 for FY21E/ FY22E/ FY23E respectively.
The consensus target price of ₹ 454/- implies a PE multiple of 21x on FY23E EPS of ₹ 21.6/-.

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