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Ranbaxy settlement on Tricor launch
Ranbaxy (RBXY IN) has settled a patent litigation case with Abbott over
fenofibrate (Tricor with annual sales of USD 1bn in US). As per the settlement,
Ranbaxy would be able to launch the generic version of Tricor (145mg and 48mg
strengths) in US, however, the launch date cannot not be ascertained since the
settlement terms are not disclosed. Abbott had earlier settled with Teva for 145
mg dosage (Teva has FTF on this strength which is the maximum selling strength)
which allows Teva to launch the drug as early as March 28, 2011 (although in
certain circumstances Teva might have to delay the launch until July 1, 2012).
Further, Biovail has FTF status on 48 mg strength and its 30 month stay expires
on March 2011. We expect Abbott to settle patent litigation case with other Para-
IV filers such as Lupin and Impax (30 months to expire on July 2011 and March
2012, respectively). We believe Ranbaxy will be allowed to launch the drug post
six months exclusivity of Teva and Biovail (August 28, 2011) along with five other
generic players.
Positive impact on Ranbaxy; Lupin’s Antara franchise could be at risk
We expect Ranbaxy to generate USD 15 mn sales with ~USD 7-8 mn PAT, per
annum, on recurring basis (assuming 90% price erosion and 15% market share in
a five player market by August’2011). However, Tricor generic launch could have
potential negative impact on Lupin’s Antara franchise (fenofibrate micronized
capsules in 43 and 130mg strength and ~USD50-55mn annual sales) in the US.
Although management has indicated that they will continue to promote Antara
through their field force and are confident to protect the franchise, however,
aggressive push from the generic players can erode the market share of Antara
(Lupin will also capture 10-15% market share from generic Tricor launch). We
have built up USD 65mn and USD 45mn revenue from Antara for FY12 and FY13E,
respectively. The higher than expected market share erosion of Antara could have
negative impact of 1-1.5% on Lupin FY12-13E EPS. We have a ‘BUY/Sector
outperformer’ on LPC, Ranbaxy is “Non rated”.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Ranbaxy settlement on Tricor launch
Ranbaxy (RBXY IN) has settled a patent litigation case with Abbott over
fenofibrate (Tricor with annual sales of USD 1bn in US). As per the settlement,
Ranbaxy would be able to launch the generic version of Tricor (145mg and 48mg
strengths) in US, however, the launch date cannot not be ascertained since the
settlement terms are not disclosed. Abbott had earlier settled with Teva for 145
mg dosage (Teva has FTF on this strength which is the maximum selling strength)
which allows Teva to launch the drug as early as March 28, 2011 (although in
certain circumstances Teva might have to delay the launch until July 1, 2012).
Further, Biovail has FTF status on 48 mg strength and its 30 month stay expires
on March 2011. We expect Abbott to settle patent litigation case with other Para-
IV filers such as Lupin and Impax (30 months to expire on July 2011 and March
2012, respectively). We believe Ranbaxy will be allowed to launch the drug post
six months exclusivity of Teva and Biovail (August 28, 2011) along with five other
generic players.
Positive impact on Ranbaxy; Lupin’s Antara franchise could be at risk
We expect Ranbaxy to generate USD 15 mn sales with ~USD 7-8 mn PAT, per
annum, on recurring basis (assuming 90% price erosion and 15% market share in
a five player market by August’2011). However, Tricor generic launch could have
potential negative impact on Lupin’s Antara franchise (fenofibrate micronized
capsules in 43 and 130mg strength and ~USD50-55mn annual sales) in the US.
Although management has indicated that they will continue to promote Antara
through their field force and are confident to protect the franchise, however,
aggressive push from the generic players can erode the market share of Antara
(Lupin will also capture 10-15% market share from generic Tricor launch). We
have built up USD 65mn and USD 45mn revenue from Antara for FY12 and FY13E,
respectively. The higher than expected market share erosion of Antara could have
negative impact of 1-1.5% on Lupin FY12-13E EPS. We have a ‘BUY/Sector
outperformer’ on LPC, Ranbaxy is “Non rated”.
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