India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Summary
In December, Indian pharma companies experienced heightened
activities on the external front. While there were as many as 11 ANDA
approvals from the USFDA, Glenmark itself received five approvals
while Sun, Aurobindo, Strides, Dr Reddy’s, Orchid and Alkem received
one approval each. Glenmark also received NDAs for two strengths of
pain relievers Oxycodone along with its partner. We also observed the
completion of some out-bound pending M&A activities with Sun,
Strides and Opto Circuits showing their intentions to buy out the
remaining shareholders of their target companies to make them wholly
owned subsidiaries.
On the IP front, we observed what could be termed as major out of
court settlement with Japanese major Takeda settling the patent issue
for its blockbuster diabetic drug Actos with as many as 11 generic
companies including some Indian players. According to this, Ranbaxy
will be eligible to share exclusivity along with Mylan and Watson while
Teva has received approval to launch authorised generics. We also saw
Sun receiving a favourable verdict from the US Appeals court of the
Federal Circuit over barring the generic launch of cancer drug Eloxatin
by a lower court after June 30, 2010. Finally, on the tie-ups front we
saw Dr Reddy’s enter into a licensing, technology, manufacturing and
marketing tie-up with Russian major R-Pharm, Natco tying up with
Watson for cancer drug Revlimid and Strides JV entering into a
purchasing agreement with Pfizer to sell 16 ANDAs.
The domestic pharma market observed a slowdown in growth in
October as per industry data on account of some seasonality and other
related issues.
Industry Update- domestic
Indian pharma market grows 6.2% in October 2010
As per secondary sale (SSA), the Indian pharmaceutical market
registered value growth of 6.2% for October 2010 compared to 19.5% in
September 2010. Generally, October is the weakest month of the year. In
October 2009, the pharma market witnessed 30% growth while during
October 2008 it posted negative growth. The lower growth in October
2010 was mainly on account of lower sales of anti-infectives, cough &
cold medicines and higher base. The value growth for October 2010
MAT (cumulative) was also recorded lower at 19.2% as compared to
21.3% as per September 2010 MAT.
NPPA revises three bulk drug prices
The National Pharmaceutical Pricing Authority (NPPA) has revised prices
of three bulk drugs i.e. Cefotaxime Sodium (Sterile), human insulin and
Aspirin and also revised the norms of conversion cost, packing charges,
process loss and packing materials. The price of Cefotaxime Sodium
(sterile) has increased by 3.23% in comparison to the existing price. This
drug is used as an antibiotic. The price of human insulin has increased
from | 34 lakh to | 39 lakh. The increase in prices was due to an increase
in the cost of raw materials. The price of Aspirin has increased 5.5%
considering the increase in market prices of major raw materials. It also
increased conversion cost and package cost by 5.8%.
Aurobindo Pharma gets tentative USFDA nod for generic Cymbalta
Capsules
Aurobindo Pharma received tentative approval from the US Food and
Drug Administration (USFDA) for its abbreviated new drug application
(ANDA) of Duloxetine Hydrochloride delayed release capsules in multiple
strengths of 20 mg, 30 mg and 60 mg. The drug is the generic version of
Eli Lilly’s Cymbalta and is used for the treatment of major depressive
disorder. Cymbalta capsules fall under the neurological (CNS) therapeutic
category. According to IMS data, sales of the drug for the 12 months
ended June 2010 were US$2.9 billion. Aurobindo filed an ANDA for the
drug with Paragraph IV certification with first to file status and it is
currently under litigation in the US district court.
Glenmark gets USFDA nod for two NDAs
Glenmark Generics, the wholly-owned subsidiary of the Glenmark
Pharmaceutical, and Lehigh Valley Technologies jointly received final
approval from the USFDA for its two new drug applications of
Oxycodone Hydrochloride 5 mg capsule and 100 mg/5ml oral solution.
The drug belongs to pain management. Both companies have signed a
new supply and marketing agreement among themselves. Under the
terms of the exclusive supply and marketing agreement between LVT
and Glenmark, LVT will be responsible for the manufacturing of the
Oxycodone product line for Glenmark’s exclusive marketing and
distribution in the generic form.
LVT will retain exclusive marketing rights to the branded version of the
Oxycodone product line. LVT will also retain exclusive marketing rights
to additional strengths of the Oxycodone product line in both generic
and branded forms. Annual sales of the drug in respective strengths and
forms are around US$13 million. As both companies received approval
for NDA, the current generic players marketing these drugs are expected
to exit from the market.
Sun Pharma gets tentative nod for generic Boniva
Sun Pharmaceutical Industries has received tentative approval from
USFDA for a generic version of Boniva. Ibandronate Sodium Injection is
used in the treatment of osteoporosis in postmenopausal women. Boniva
is a registered trademark of Hoffmann-La Roche Inc. Annual sales in the
US are approximately $70 million.
Glenmark receives USFDA approval for Felodipine tablets
Glenmark Pharmaceutical received final approval for its abbreviated new
drug application (ANDA) of Felodipine extended release tablets in
multiple strengths of 2.5 mg, 5 mg and 10 mg from the USFDA. The drug
is a generic version of Astra Zeneca’s Plendil tablets and is used to treat
hypertension. The annual sales of the drug in US market are around
US$97 million, as per IMS Health.
Strides receives USFDA approval for anti-arrhythmic injection
Strides Arcolab has received USFDA approval for Lidocaine
Hydrochloride Injection USP, 0.5% (5 mg/ml), 1% (10 mg/ml), multi-dose
vials. According to IMS data, the total US market for Lidocaine injection
in 2009 was approximately US$61 million. Lidocaine Hydrochloride
Injection is an anti-arrhythmic agent (used to treat irregular heartbeat)
that is administered intravenously by direct injection. The drug may also
be used for resistant seizure treatment. It is contraindicated in patients
with a known history of hypersensitivity to local aesthetics of the amide
type.
USFDA grants approval for three Glenmark drugs
USFDA granted two final approvals and a tentative approval for
Glenmark Generic drugs. It received final approvals for drugs
Indomethacin capsules and Sulfamethxazole & Trimethoprim tablets and
tentative approval for Eszopiclone tablets. Indomethacin is classified as a
non-steroidal drug that reduces fever, pain and inflammation. Glenmark
received approval to market the drug in strengths of 25 mg and 50 mg.
Indomethacin Capsules are generic versions of Indocin capsules
manufactured and marketed by Iroko Pharma. Total sales achieved by
Indomethacin capsules for the 12 months ended September 2010 in the
US market were US$20 million. Sulfamethxazole and Trimethoprim
tablets are generic versions of Mutual Pharm’s Bactrim tablets that had
annual sales of US$31million and were used to treat urinary infection.
Eszopiclone tablets are generic version of Sepracor’s Lunesta tablets,
which had annual sales of US$760 million for the 12 month ended
September 2010. Glenmark filed the ANDA of the drug with Para IV
certification. As a result, Sepracor sued Glenmark. During early 2010,
both companies entered into a settlement and license agreement with
Sepracor to resolve a US patent infringement suit. Under the agreement,
Glenmark can launch the drug on November 30, 2013, which is two and
half months prior to the patent expiry.
Glenmark gets USFDA approval for generic Lithobid tablets
Glenmark received final approval for its ANDA of Lithium Carbonate 300
mg extended release tablets from USFDA. Lithium Carbonate 300 mg
extended release tablets are Glenmark’s generic version of Noven
Therapeutics Lithobid, which is indicated in the treatment of manic
episodes of bipolar disorder. According to IMS Health, total sales
achieved in the US market for the 12 month period ending September
2010 were US$21 million.
Product launches
Elder to launch 8-10 products in Bulgaria
Elder Pharmaceuticals is planning to launch 8-10 products in Bulgaria
through Elder Biomeda AD. The products would be in the women’s
healthcare and pain management therapies. The company is aiming to
generate €8-10 million in FY12 from the Bulgarian market. It had
generated revenues of €2 million from the Bulgarian market and is
expected to close the current financial year with around €5 million.
IP issues
Ranbaxy settles patent litigation with Takeda for generic Actos
Japan’s Takeda Pharmaceutical Co has settled patent infringement suits
out of court with 11 generic drug companies, including Ranbaxy
Laboratories, Torrent Pharmaceuticals, Dr Reddy’s Laboratories,
Wockhardt and Aurobindo Pharma over its flagship diabetes drug, Actos
and its variants. Takeda has also granted Israeli drug company Teva a
licence to market an authorised generic version of the drug in the US
during the same period. The other generic companies, including Dr
Reddy’s, Torrent, Wockhardt and Aurobindo, can launch their versions
after the 180-day exclusive period. According to data of drug sales
tracking agency IMS, Actos and its variants had sales of $4 billion last
year. Takeda is the inventor and developer of Actos, which was launched
commercially in the US in 1999 for the treatment of Type 2 diabetes and
has been prescribed for more than 10 million patients to date.
Hoffmann-La Roche sues Sun Pharmaceuticals on Actonel tablets
Swiss drug maker Hoffmann-La Roche and Warner Chilcott Co have sued
Sun Pharma Global Inc, an arm of Sun Pharmaceutical Industries, in the
US for alleged patent infringement of Actonel (risedronate sodium tablets
in 150 mg form), used for treating bone disorder disease osteoporosis.
The once a monthly dosage form, an improved version of Actonel, is
manufactured and sold by Warner Chilcott. Roche is the owner of the
patent under dispute. Actonel and its various versions accounted for $1.4
billion of Procter and Gamble’s (P&G) prescription business of $2.3 billion
in the year ended June 30, 2009. Actonel has a patent validity till 2013
and beyond for various versions.
Sun wins patent infringement case against Sanofi Aventis for Eloxatin
French major Sanofi Aventis SA lost an appeals court ruling that
overturned an order barring generic versions of its cancer drug Eloxatin.
Sun Pharmaceutical Industries Ltd, which had a copy of the drug on the
market, can challenge the terms of a consent judgment reached over the
treatment, according to the US Court of Appeals for the Federal Circuit.
Sun had stopped Eloxatin sales since June 30, 2010. It is still unclear
when Sun will re launch Eloxatin in the US market.
M & A’s and demerger
Jubilant Life Sciences demerges its agri & polymer business
Jubilant Life Sciences has demerged the entity's agri and performance
polymers business into an independent company Jubilant Industries. The
demerger, which came into effect from November 15, is part of efforts to
create an entity that would be focused on life sciences. As part of the
demerger, shareholders of Jubilant Life Sciences would be entitled to get
one share of Jubilant Industries for every 20 shares held in the company.
Post demerger, the conversion price for the outstanding foreign currency
convertible bonds (FCCBs) worth $142 million, would be reset. The
conversion price of | 413.45 per share of Jubilant Life Sciences has to be
reset at | 379 per share.
Opto completes acquisition of Cardiac Science
Opto Circuits (India) has acquired around 76% of the outstanding
common shares of US-based Cardiac Science Corporation as part of its
acquisition plans. Earlier, the company had agreed to acquire Cardiac
Science Corporation for $64 million. Following the merger, Cardiac
Science will become a wholly-owned subsidiary of Opto Circuits. Cardiac
Science specialises in many healthcare equipment in the cardiology
space including electro-cardiograph devices, cardiac stress treadmills
and systems, vital sign monitors among others. As per the merger deal
with Cardiac Science, Opto Circuits has agreed to acquire all the
outstanding shares of Cardiac Science for $2.30 per share.
Opto Circuits India, through Cardiac Science Corporation, the wholly
owned subsidiary of the company and a global leader in automated
external defibrillator (AED) and diagnostic cardiac monitoring devices,
added two electrocardiographs (ECGs) under its Burdick brand. The
ECGs are available only in the US.
Strides to acquire remaining stake in Ascent Pharma
Strides Arcolab will acquire the residual 40% stake in Ascent
Pharmahealth Ltd, an Australian subsidiary that is into the branded
generics business in Australia and Asia. Ascent is listed on the Australian
Stock Exchange, with Strides owning about 60% of its equity capital.
Strides will pay A$0.40 involving a payout of about A$40 million, or | 180
crore. The offer represented a premium of 54% to Ascent’s closing price
a day before the offer was made. In the half-year ended June, Ascent’s
sales rose by 25% to A$59 million and its net profit rose by 68% In the
half-year ended June, Ascent’s sales rose by 25% to A$59 million and its
net profit rose by 68% to A$4.6 million.
Sun Pharma to acquire remaining stake in Caraco Pharma
Sun Pharmaceutical Industries plans to de-list its US-based subsidiary
Caraco Pharmaceutical from the US bourses. It would acquire the
remaining Caraco shares (~26%) at $4.75 per share in cash, a 5%
premium over the most recent closing price. The deal will cost Sun
Pharma approximately $45.18 million (| 214 crore). It did not disclose the
deal size.
R&D developments
Biocon plans to start human trials for cancer vaccine in 2011
Biocon is planning to start clinical trails for its cancer vaccine in 2011.
Currently, the vaccine is in the pre-clinical stage. The company along
with its US based strategic partner Iatric Inc is developing the vaccine to
treat cancer tumours.
Tie-ups
Dr Reddy’s ties up with Russian R-Pharm
Dr Reddy’s Laboratories has entered into a licensing, technology
transfer, manufacturing and marketing agreement with Russia based RPharm. The partnership is in the area of high-technology and works on a
profit sharing model. It will entail licensing of manufacturing know-how
of products by Dr Reddy’s, local manufacturing of products in Russia, codevelopment of high technology products and knowledge sharing
between both companies. The deal allows Dr Reddy’s to import and
market R-Pharm products in India.
Natco ties up with Watson for cancer drug
Natco Pharma will partner with Watson Pharmaceuticals Inc to develop
and sell a generic version of Celgene Corp' big-selling blood cancer drug
Revlimid. Natco has already filed a US application for a version of the
drug, which is known generically as lenalidomide. The companies
believe Natco may be the first applicant, which could entitle it to a
lucrative 180-day period of being the lone generic on the market should it
win approval. Revlimid clocked $1.7 billion of sales in 2009.
Strides JV enters supply agreement with Pfizer
Akorn-Strides LLC, a joint venture between Strides and Akorn, Inc, has
entered into a purchase agreement with Pfizer Inc to sell 16 ANDAs and
six filed ANDAs. Akorn-Strides LLC will continue to manufacture and
distribute the approved products until April 30, 2011. Strides will be
entitled to US$28.2 million cash as its share of the consideration to
entering into a supply agreement with Pfizer for manufacture and supply
of these products.
CRAMS
Dishman signs with European MNC to supply API for cardiac drug
Dishman Pharmaceuticals has signed an agreement with a European
MNC to manufacture active pharmaceutical ingredients (API) for a
cardiac drug. The deal is worth around US$50 million. The European
MNC is yet to launch the cardiac drug and expects the drug to generate
US$2 billion per year once it is launched. The company expects to
generate revenues of US$10 million in FY12 from this deal.
Other developments
Dr Reddy’s plans to exit UAE market
Dr Reddy’s Laboratories is planning to shut down its UAE operations and
market those drugs through the GlaxoSmithKline deal. Dr Reddy’s
entered a supply agreement with GSK in June 2009. Under the deal, GSK
markets the selected Dr Reddy’s drugs in emerging markets excluding
UAE.
Gas leak in Dr Reddy’s manufacturing facility
A gas leak at Dr Reddy’s drug manufacturing unit in Hyderabad caused
the death of two employees. The accidental leak of nitrogen gas took
place in the unit of Dr Reddy’s facility for manufacture of Omeprazole
drug.
Cipla gets two notices from NPPA
Cipla has received two notices from the government demanding a total
of | 73 crore for alleged over pricing of two drugs i.e. Salbutamol &
Ciprofloxacin. The notices from National Pharmaceutical Pricing authority
(NPPA) demanded | 47.7 crore for respiratory drug Salbutamol and |
25.5 crore for antibiotic Ciprofloxacin. With these two notices, total
notices given to Cipla from NPPA reached five in the last 10 years
Overcharge amount claimed by the government from Cipla has crossed |
1000 crore. The other drugs from Cipla under the scanner for alleged
over charging include respiratory drug Theophylline, Cephalosporinantibiotic Cefadroxil and antibiotic Norfloxacin.
India holds 24% of total CEPs certificates of EDQM
To manufacture and market pharma products in EU markets, the
companies need to get certificates of suitability of European
Pharmacopoeia monographs (CEPs) from European Directorate of
Quality Medicine. Pharmmexcil has conducted the study on CEPs
approved by EDQM. Till July 2010, 2858 valid CEPs were approved to
803 companies globally (belonging to 51 countries) by EDQM. Of this,
India has filed 687 valid CEPs and accounts for 24% of total CEPs.
Currently, India holds largest CEPs certificate holder with EDQM. Top 5
companies holding maximum CEPs are Aurobindo Pharma (69 CEPs),
Cipla (44 CEPs), Matrix Laboratories (35 CEPs), Dr Reddy’s Laboratories
(35 CEPs) and Ipca Laboratories (31 CEPs).
Lupin to manufacture APIs in India for its Japanese subsidiary
Lupin will soon be shifting the manufacturing base for its Japanese
subsidiary Kyowa Pharma to Goa, thus, rationalising costs by over 25-
30%. Lupin has already applied for approvals to transfer the API
manufacturing site for four key products from third parties to Lupin's Goa
facility and expects to shift 10 more by end 2011.
Ranbaxy’s JV bags order worth 913.5 million rand for HIV drugs
Ranbaxy Pty Ltd's joint venture company, Sonke Pharmaceuticals, got an
order worth 913.5 million rand from the South African government. As
per the order, it will supply anti-retroviral medication to the South African
government for the next two years. Ranbaxy Pty is a wholly-owned
subsidiary of Ranbaxy Laboratories Ltd. Sonke Pharma is a joint venture
between Ranbaxy Pty and Community Investment Holdings. The
medicines will be manufactured in South Africa and at Ranbaxy's
facilities in India.
Strides terminates KV Pharma JV
Strides Arcolab will pay $7.25 million to KV Pharmaceuticals for
termination of a supply and licensing agreement entered in 2005. After
cancellation of the pact, 491,606 cumulative preference shares of Strides
with face value of | 1,000 each issued to KV Pharmaceuticals in 2005
were redeemed at face value along with accrues dividend thereon. The
agreement was cancelled and all intellectual properties for products
developed under the agreement were retained by Strides.
Caraco extends distribution agreement with Sun Pharma
Caraco Pharmaceutical Laboratories has extended two distribution and
future termination agreements with Sun Pharmaceutical Industries until
January 28, 2012. The marketing agreement, which was originally set to
expire in January 2010, was extended for a one year renewal in 2009 and
is being extended for an additional one year term. The distribution and
sale agreement, entered into in January 2008, had a three-year term. This
agreement was renewed for an additional one year term when neither
party opted to cancel. Caraco and the independent committee of
Caraco's board of directors approached Sun and attempted to negotiate
long-term renewals for each agreement. However, Sun exercised its right
to end the agreements, citing margin constraints due to competitive
pricing pressures. Accordingly, Sun has informed Caraco of its intention
to transfer the sales and distribution of Sun products from Caraco to Sun
and/or its wholly-owned affiliates to enhance its ability to compete.
No comments:
Post a Comment