Jubilant Pharmova is a diversified pharmaceutical company with a strong presence across several key segments. Its portfolio includes radiopharmacy, allergy immunotherapy, contract CRDMO, generics, and more.
The company appears to be at a sweet spot, with several of its segments showing strong growth potential in the future. At the same time, it is navigating multiple turnarounds across other segments, whether it’s returning to profitability, improving margins, or making strategic decisions around its product portfolio
Let’s take a closer look at its business segments to understand better.
Radiopharma
Its radiopharma segment is further divided into two sub-segments – radiopharmaceuticals and radiopharmacy. The former comprises development, manufacturing, and commercialization while the latter takes care of its distribution. Let’s deep diver into it-
Radiopharmaceuticals
Radiopharmaceuticals are drugs that contain radioactive isotopes, which emit radiation. These drugs can be used for two main purposes: either to visualize organs, tissues, or tumors or to deliver targeted radiation therapy to treat conditions like cancer and hyperthyroidism.
There are two main types of nuclear imaging techniques that use radiopharmaceuticals: SPECT (Single Photon Emission Computed Tomography) and PET (Positron Emission Tomography). SPECT is widely used for basic imaging at a lower cost, while PET offers higher-resolution imaging, making it ideal for more detailed scans.
In terms of therapeutics, radiopharmaceuticals are also used as a treatment tool by targeting radiation directly to diseased cells.
Jubilant in this vertical stands well diversified with its presence across SPECT, PET, and also radiopharmaceutical therapeutics.
*Source: Jubilant Pharmova Q2 FY25 Presentation.
It is also a market leader in three of its products- MAA, DTPA and Hicon I 131.
*Source: Jubilant Pharmova Q2 FY25 Presentation.
The US radiopharmaceutical market is expected to reach ~$20 billion(1.7 lakh Cr) by 2030, growing at a CAGR of 20%. The industry’s growth is driven by the growing demand for superior imaging and therapeutic solutions and the increasing number of use cases for unmet needs.
*Source: Jubilant Pharmova Q2 FY25 Presentation.
PET imaging, particularly, is a major growth driver due to its fundamental benefits, including better imaging, significantly lower false negatives, and faster examination times. Its applications are also expanding beyond oncology, with uses in cardiology scans and Alzheimer’s detection.
*Source: Jubilant Pharmova Q2 FY25 Presentation.
Jubilant Pharmova is also a leader in the cardiac PET scan market through its product, RUBI-FILL. Installed in the top 80% of U.S. cardiac networks, RUBI-FILL is positioned to capture further market share, benefiting from cost advantages over competitors and superior image quality due to its patented features.
The company aims to expand its product portfolio in both PET and SPECT imaging, targeting addressable markets of ~ $500 million(4,200 Cr) and $50 million(400 Cr), respectively. Additionally, it has completed patient dosing for the Phase II clinical trial of its therapeutic product, MIBG, which is expected to launch by CY26.
Radiopharmacy
A radiopharmacy is a distributor of radiopharmaceutical products. In the U.S., the radiopharmacy market is highly consolidated, with the top three players accounting for over 70% of the distribution.
As previously mentioned, the growing demand for PET diagnostic products is driving an increased need for radiopharmacies. Other promising factors include:
- SPECT pharmacies are adapting to handle generator-based PET products.
- Clinics and hospitals are finding it more economical to outsource radiopharmacy services to specialized providers.
- With the advent of new isotopes, the scope of radiopharmacy applications is expected to expand.
Jubilant is the 2nd largest radiopharmacy network in the U.S., with 46 nuclear pharmacies (43 SPECT and 3 PET) serving 1,800 hospitals. The company plans to invest $50 million to expand its PET radiopharmacy network by adding 6 new sites across the U.S., with operations expected to begin by FY28.
Once fully operational and at optimum utilization, PET pharmacies are projected to deliver EBITDA margins of over 20%.
Over the last three years, revenues from the radiopharma segment have grown at an impressive 19% CAGR, primarily driven by its radiopharmacies sub-segment, which grew at a robust 25% CAGR.
While the radiopharmaceutical sub-segment has grown at a more moderate 8% CAGR, it’s important to note that this segment generates high margins. For instance, the EBITDA margin for the segment stood at 48% in H1 FY25.
Allergy Immunotherapy
As the name explains, it’s the treatment for allergic reactions to various types of allergens, such as Pollen, Mold, Pets, Food, and Insects (treated by venom immunotherapy). In this treatment, repeated shots of allergic antigens are provided to develop immunity over a period of time.
As per industry reports, more than 50 million Americans suffer from some type of allergy every year. The most common is Pollen allergy.
*Source: Jubilant Pharmova Q2 FY25 Presentation.
In allergy immunotherapy, there are two types of delivery mechanisms:
- Sub Lingual (SLIT) – Ideal for simpler cases
- Sub Cutaneous (SCIT) – More Intensive and effective for complex cases
Jubilant is the 2nd largest player in the US SCIT allergy market and has been the sole supplier of Venom immunotherapy in the US since 2018.
It has a balanced product portfolio with 6 different insect venom products and 200+ allergenic extracts and skin testing devices.
*Source: Jubilant Pharmova Q2 FY25 Presentation.
In addition to the US markets, the company also exports to multiple international markets like Canada, Europe, and Australia. The business is backed by the century-old trusted brand of HollisterStier.
The global allergy immunotherapy market is estimated at $2.2 billion in 2023, which is expected to grow at a CAGR of 7% to $3 billion by 2028 led by increasing allergy cases, awareness of allergy treatment, and advancement in treatment options.
*Source: Jubilant Pharmova Q2 FY25 Presentation.
The company majorly has 3 growth strategies for this segment:
- Create Customer Awareness
- Use Venom Products to gain wallet share in allergenic extracts
- Penetrate the European market via strategic partnerships and expand its distribution channel in APAC, MEA & LATAM
The allergy immunotherapy segment has seen a steady growth rate of 18% CAGR over the past 3 years, and it remains a high-margin business, with EBITDA margins typically ranging between 35-40%.
However, in H1 FY25, the segment’s revenue growth slowed to just 2%, and EBITDA declined by 20% YoY. EBITDA margins also dropped from 41% in H1 FY24 to 32%. According to management, this decline was mainly due to delays in product launches in new markets by its partners. They expect the margins to normalize in H2 FY25.
CDMO Sterile Injectables
The sterile injectables segment, following radiopharmaceuticals, is another vertical expected to experience strong growth in the coming years. The Global CDMO – SI market size is expected to grow at a CAGR of 11% to 20 Bn by 2027, majorly driven by factors like-
- An increasing number of drugs/injectables in the development pipeline, driven by biologics (65% of current pipeline).
- Outsourcing is expected to increase, driven by limited internal capacity and cost reduction measures.
- Since 2015, 50-60% of new drug shortages in the US have been injectables.
- A recent McKinsey report highlighted a 6.8Bn demand vs. 6.1Bn supply specifically for sterile vials – a 700 Mn. sterile vial shortfall.
- Novo Holding’s acquisition of Catalent may further reduce the overall capacity available for outsourcing, given Novo is expected to use capacity for manufacturing their anti-obesity drugs.
*Source: Jubilant Pharmova Q2 FY25 Presentation.
The company operates two facilities, one in Spokane, U.S., and another in Montreal, Canada, both providing manufacturing services such as sterile fill and finish injectables (liquid and lyophilization), full-service ophthalmic offerings (liquids, ointments, and creams), and ampoules.
To meet growing demand, the company is doubling its capacity at the Spokane facility with an investment of ~$285 million. This expansion includes adding two high-speed injectable fill lines, each capable of filling 400 vials per minute, along with two ~350 sq. ft. lyophilizers. This expansion is partly funded by the US government to the tune of ~$149 Mn. One line is expected to start commercial production in FY26 and the other line in FY28.
*Source: Jubilant Pharmova Q2 FY25 Presentation. 
Revenue from the sterile injectables segment have returned to pre-COVID levels, as COVID-related contracts have tapered off. The business is expected to operate at healthy levels until new capacity is added, which will help drive future volume growth.
Additionally, the Montreal facility has been under OAI (Official Action Indicated) classification since May 2023. Management expects the facility to resume operations in mid-Q3 FY25, as it is actively implementing corrective and preventive actions.
In terms of H1 FY25, the segment has shown a solid 13% YoY revenue growth, despite the Montreal facility undergoing remediation. EBITDA also saw a significant 51% YoY increase, largely due to retrospective pricing improvements.
Contract Research Development and Manufacturing Organisation (CRDMO)
Its CRDMO segment is further split into two sub-segments –
- Drug Discovery
- CDMO – API
Drug Discovery
Its drug discovery segment encompasses both the global drug discovery market as well as the API/ formulation development market. Both markets are expected to grow at 5-6% CAGR by 2028.
*Source: Jubilant Pharmova Q2 FY25 Presentation.
The medium-term outlook for the drug discovery segment appears strong, with early signs of recovery as large pharmaceutical companies increasingly look to outsource some of their discovery and manufacturing processes.
The company offers an integrated solution, covering the entire process from early-stage discovery and development to the commercialization of molecules for pharmaceutical clients. In FY24, its project portfolio included Full-Time Equivalent (FTE), Fee for Service (FFS), and Integrated Drug Discovery (IDD) contracts.
The Biosecure Act also supports the segment’s growth, as it seeks to prevent the U.S. government and U.S.-based life sciences companies from working with biotech service providers connected to foreign adversaries. As a result, large pharma companies are looking to de-risk their supply chains by adding “friend sourcing” locations.
Looking ahead, the company aims to add more large pharma customers and is on track, having added two in Q4 FY24 and one more in H1 FY25. It is also well-prepared to scale up its infrastructure to meet the growing demand in the Contract Research Organization (CRO) sector.
CDMO-API
APIs are compounds that are responsible for rendering the therapeutic action to the final formulation of the drug. The CDMO-API market is expected to grow at a CAGR of more than 6%.
*Source: Jubilant Pharmova Q2 FY25 Presentation.
The CDMO (Contract Development and Manufacturing Organization) API market is largely dominated by small molecules, which are low-value, high-volume products. However, higher growth is expected in the high-potency APIs and large molecule segments, which are high-value and complex.
Factors such as the Biosecure Act and India’s high dependence on China for API supplies further enhance growth potential. Currently, estimates suggest that 70% of India’s API requirements are sourced from China.
The company boasts a broad portfolio of 100 different APIs across various therapeutic areas, including the Central Nervous System (CNS), Cardiovascular System (CVS), anti-infectives, and anti-diabetics. It serves over 160 customers in more than 50 countries. The company operates a manufacturing facility in Nanjangud, India, covering 41 acres and featuring seven multi-stream manufacturing blocks.
Jubilant’s drug discovery business faced challenges over the past two years due to the biotech funding winter in the U.S., resulting in a 14% YoY decline in FY24 topline. However, with a gradual recovery in biotech funding, the segment is expected to perform well in 2025. This is already reflected in the H1 FY25 results, where the drug discovery segment saw a 21% YoY growth.
The revenues from the API segment have remained flat while the margins have also remained range-bound. The company’s focus is now on selling more profitable products as a result of which its H1 FY25 topline has declined by 25% YoY while EBITDA margins have improved by ~3%.
Generics
As the name suggests, generics are drugs that are bio-equivalent to some branded drug but are typically sold at a cheaper rate once the original patent or exclusivity period expires. The overall generics market is growing on the back of the prevalence of chronic diseases and exclusivity expiries.
*Source: Jubilant Pharmova Q2 FY25 Presentation.
The US market is expected to grow by ~2% with early signs of a decrease in price reductions, the non-US market is expected to grow by ~5-7% while the Indian markets are expected to grow in excess of 10%.
Jubilant generics business covers broad therapeutic areas like Cardiovascular Systems (CVS), Central Nervous system (CNS), Gastrointestinal (GI), antibiotics, and multi-specialty with a global presence serving more than 50 countries.
Below is the growth strategy by Jubilant for its three geographical markets:
*Source: Jubilant Pharmova Q2 FY25 Presentation.
The generic business has faced significant challenges after its Roorkee facility received an import alert in Jul-21. As a result, its topline declined from 1160 Cr in FY22 to 775 Cr in FY24. The generic business also turned loss-making in FY22 due to factors like the absence of new launches, remediation costs, and high operational costs at the US facility.
The Roorkee facility received FDA’s clearance in Apr-24. And, in order to move towards profitability, the management has decided to shut down the in-house manufacturing at its US facility and transfer profitable products to CMOs. It also plans to launch 6-8 products/annum in its non-US market and to start supplying approved products from its Roorkee facility to the US market in H2 FY25.
As mentioned earlier, the generic business has faced challenges in recent years. However, with the reforms implemented, the company was able to turn profitable in H1 FY25. Its EBITDA margin improved from -19% to 3% on a YoY basis.
Looking ahead, margins from the segment are expected to improve further, reaching high single digits over the next 2-3 years. If the company successfully executes its strategies, this could turn into a strong turnaround story.
Proprietary Novel Drugs
Jubilant also has a proprietary novel drugs segment. Proprietary novel drugs are newly developed drugs that typically address unmet medical needs, improve treatment outcomes, or provide entirely new mechanisms of action compared to existing therapies.
Here’s a pipeline overview:
*Source: Jubilant Pharmova Q2 FY25 Presentation.
Two clinical-stage drugs are under development with significant value inflection points on clinical outcomes:
- JBI-802: It has shown therapeutic promise in Phase 1 trials. The first patient dosing has been completed, with interim Phase 2 data expected in 2025.
- JBI-778: It is currently undergoing Phase 1 trials. The first patient dosing has been completed, with interim Phase 1 data anticipated in 2025.
Also, EBITDA losses have halved to 9 cr in H1 FY25 as it only focuses on 2 key clinical-stage projects and is investing in a calibrated manner.
With that, we’ve covered all of Jubilant’s product verticals, and you should now have a much clearer understanding of what the company does.
Let’s now take a more consolidated view of the business and unfold it’s prospects.
Financial Overview
Jubilant’s consolidated revenues have grown at a CAGR of 5% in the last 3 years. The majority of this growth has come from its radiopharma and allergy immunotherapy segments, both growing at ~18-19% CAGR.
As discussed above, its other segments saw tepid growth. The generic drugs segment was impacted by the remediation of its Roorkee facility, drug discovery saw muted demand due to the biotech funding winter, sterile injectables stabilized at post-COVID levels, and the API segment saw flat growth.
Let us now see what its revenue split looks like:
Jubilant has significantly increased its share of revenues from its Radiopharma and allergy immunotherapy from ~43% in FY22 to ~57% by H1 FY25.
We like its improving product mix, anticipating stronger growth in the future from segments like Radiopharma, allergy immunotherapy, drug discovery (as part of CRDMO), and sterile injectables.
Now, moving towards profitability:
Jubilant’s EBITDA took a hit in FY22 with its Roorkee facility receiving an import alert, weaker markets for drug discovery, and covid contracts starting to taper off its sterile injectables segment.
The hit got even steeper in FY23, with its margins falling by 5%. However, it has started gradually recovering post that with margins recovering to ~16% in H1 FY25.
Let us now see how its margin trajectory looks across segments.
Referring to the table above, we can see that the margins of Jubilant’s generics segment took a significant hit, falling to as low as -30% in FY22. However, the segment returned to profitability in H1 FY25. Margins for its CRDMO and sterile injectables segments also declined, primarily due to weaker performance in the drug discovery business for the former, while the API segment remained stable with improving margins, driven by a focus on more profitable products. The margin decline in the injectables segments was largely due to the tapering off of high-margin COVID-related projects.
Looking ahead, we anticipate margin improvements across all three segments. The planned turnaround of the generics business, optimism in the drug discovery space, and increased capacity in the sterile injectables segment should support this recovery.
Turning to the radiopharma segment, the margins have remained robust, driven by the high-margin radiopharmaceuticals business, which boasts average EBITDA margins of over 45%. The radiopharmacies segment, although a lower-margin business, also turned profitable in FY24. We expect further margin improvement from the pharmacy business, with six additional PET radiopharmacies planned in the pipeline.
Lastly, the allergy immunotherapy segment continues to be a high-margin business. However, as discussed earlier, it experienced a decline in H1 FY25 due to delayed product launches by its partners, the management expects this to normalize in the second half of FY25.
Valuation and Way Forward
Jubilant stands amidst interesting times in the industry. Some of its verticals have shown robust growth in the last few years, while others have faced their fair share of difficulties but seem to be recovering now. The company is also actively strengthening its balance sheet, reducing leverage.
Its net debt has come down from 2,457 Cr in FY24 to 1,736 Cr by the end of H1 FY25, improving its Net Debt/EBITDA(TTM) to 1.5x. This is expected to improve further in turn improving profitability going forward.
Here is a quick recap:
- The radiopharma segment has demonstrated strong growth, and the momentum is expected to continue due to rising demand for advanced imaging and therapeutic solutions. The radiopharmaceutical segment should maintain its high margins, while the radiopharmacy segment has turned profitable and seems poised for further improvement.
- The allergy immunotherapy segment has also shown solid growth, despite challenges in H1 FY25 due to delayed product launches. The segment is expected to normalize in H2 FY25, maintaining its growth trajectory.
- The sterile injectables segment is set to benefit from the growing supply-demand gap, and adding more capacity will further boost its potential.
- Its drug discovery business has felt some heat in the last 2-3 years, but with the biotech funding winter coming to an end and factors like the Biosecure Act, the segment sees growth potential going forward.
- There is a shift in the company’s focus towards its CDMO-API business, with more focus on selling profitable products. The segment might grow slower in comparison to its counterparts but margins are expected to improve.
- Its generic segment seems perfectly poised for a turnaround story, which has started with the business turning back to profitability on the back of the closing down of US facility and the Roorkee facility receiving FDA clearance.
In terms of valuation, Jubilant Pharmova as of the day of writing is trading at an Enterprise Value of ~19,900 Cr (Market Cap: 18,245 Cr + Debt: 2825 Cr – Cash: 1077 Cr) and considering its FY24 EBITDA, its EV/EBITDA comes at 20 times.
Let us now forecast its EBITDA across segments:
Overall, Jubilant Pharmova seems like a bet worth taking. The performance of its segments—radiopharma, allergy immunotherapy, and sterile injectables will be crucial, as will the successful turnaround of its drug discovery, API, and generics segments.
Disclosure: This report is authored by Sidhanth Paul and Reviewed by Krishna Appala, Research Analyst. We, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific view(s) in this report.
Research Analyst or his/her relative or Capitalmind Research LLP does not have any financial interest in the subject company. Also, the Research Analyst, his relative, Capitalmind Research LLP, or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further Research Analyst or his relative or Capitalmind Research LLP or its associate does not have any material conflict of interest at the time of publication of this research report.
Also, Jubilant Pharmova is a part of our Capitalmind Premium Portfolios. This article is intended solely for informational purposes and should not be considered as an investment recommendation.
Capitalmind Research LLP is a SEBI Registered Research Analyst having registration no. INH000014003.
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