Aricept exclusivity confirmed
FDA confirms Ranbaxy’s first to file (FTF) status on Aricept
Aricept (Donepezil) is an Alzheimer’s drug from Eisai. FDA had previously given
final approval for Teva’s ANDA casting doubts on whether Rbxy has potential
exclusivity for this product or may be a shared exclusivity along with Teva. Rbxy
ANDA filing was not litigated by Eisai. FDA today has confirmed Rbxy’s
exclusive FTF status and 180 day exclusivity for the product. The co. is working
with the FDA to ensure timely approval and launch of its product.
Raising estimates by 57%/32% for 2010/11 on Aricept generic
Aricept had US$2bn in US revenues in 2009. We expect Ranbaxy to launch the
drug post patent expiry on 25th Nov 2010. We incorporate Aricept with a 180 day
exclusivity in our estimates and raise our 2010/2011 EPS for Rbxy by
56.5%/31.5% to Rs 29.26/52.72 from Rs 18.70/40.10 respectively.
Reiterating progress on US FDA issues
During our recent meeting, mgmt. reiterated their stance that they expect to meet
FDA with regards to all open issues in the next 2-3 months. Mgmt. felt they remain
on track with regards to resolving the FDA issues this year.
Valuation: Maintain Buy, Raise PT to Rs 670 from Rs 630
We derive our 12-mth price target using DCF methodology explicitly forecasting
long-term valuation drivers using UBS’s VCAM tool with a WACC of 11%. We
add Rs15/share as risk adjusted value of the Valcyte opportunity. We maintain our
Buy on the stock as we believe risk-reward continues to be favourable.
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