Gland B2B Business Model and Growth Strategy
Gland's B2B Model: Salient Features
Advantages Include Stable Cash Flows, Better Profitability Profile, Margin Stability from Natural
Hedge Against Raw Material Pricing and End-formulation Pricing Fluctuations
1
Steady/Predictable Cash Flow
Long-term supply contracts with marketing partners
ranging from 3-5 years
Stronger partnerships due to lack of injectables
manufacturers with good regulatory track record
Products licensed to marketing partners strong in
particular therapeutic areas resulting in higher
market share
6
Lower R&D Litigation Risks
Reduce risk by partnering with a marketing partner
to cover R&D litigation expenses
Revenue Growth: 2014-19 Gross Margins: 2019
2
Better Operating Profits
Efficient cost profile due to relatively lower SG&A vs
B2C players
15.4%
58.1%
40.1%
3.4%
Gland
B2C Players
Gland
B2C Players
3
5 Lower RM1 / Formulation Pricing Risk
IP-led model helps generate revenue from transfer
pricing and profit sharing
Revenues and profits through transfer pricing are
immune to raw material price fluctuations
Transfer pricing also helps regulate any adverse
impact from price erosion in end-formulations, as it
gets restricted to the profit share component
4 Lower Working Capital Requirement
Lower requirements due to better inventory
management, planned payables and better visibility
on receivables
Economies of Scale
Due to differentiated B2B Model, Gland can derive
scale benefit at a product as well as formulation level
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Gland has Demonstrated Faster Revenue Growth in Last 5 Years While Generating Superior Margins vs B2C and B2B Players
Source: IQVIA Report.
Note: (1) RM- Raw Material.
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