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With yesterday’s approval, generic Taxotere will soon find its way in
the CDH‐Hospira JV – marking the JV’s entry in the US region. With this
key launch, we raise our target multiple to 19x and raise our price
target to INR840. Upgrade to ADD.
Hospira (HSP US, NR) has received an approval from the US FDA to market
generic Taxotere (docetaxel), originally from the Sanofi‐Aventis (SNY US, NR)
stable. HSP had filed as a 505(b)(2). HSP will market in 20/80/160mg vials at
10mg/ml concentration.
The compound patent (including pediatric exclusivity) for Taxotere expired
in Nov10; the Orange Book lists at least 4 composition patents (expiring in
Jan13 and May14).
SNY recorded sales of EUR2.1bn from Taxotere in 2010, down 2.5% on a
reported basis; US sales at cUSD1.1bn in 2010 (EUR786mn, down 8% on
constant currency).
HSP’s approval follows a delay on labeling issues faced by HSP. HSP expects
to commercially launch the product later this month.
HSP‐CDH’s docetaxel offers additional user efficiency; while the original
product follows a two‐step process prior to infusion, HSP’s generic is
formulated as a single‐vial formulation, effectively reducing handling steps
in the preparation of the product. This product superiority is likely to help
retain market share as other generics enter the space. Sun Pharma (SUNP N,
NR) and Apotex have also filed 505 (b)(2) applications. Sandoz (NVS US, NR)
and Accord have filed ANDA applicants. SUNP’s 30‐month stay expires in
Jan12.
HSP already markets docetaxel in Europe and Australia. The product would
mark the JV’s entry in the US market.
Our FY11f estimates for CDH factor in cUSD2.5mn as sales to the US region
(total revenues under the JV for FY11f at INR2.3bn, CDH’s 50% share at
INR1.2bn). For FY12f, we assume JV sales at INR5bn (INR2.5bn as CDH’s
share).
Evolving model – mix of steady businesses and tapping new frontiers
CDH has been investing in business frontiers, including niche filings in US
generics, biologics and vaccines. While these investments are unlikely to
contribute to revenues over the medium term, steady delivery in key markets,
topped up by contribution from new revenue streams and better visibility on
the strength of the US pipeline, could support further re‐rating in the P/E. The
Union Budget FY12 proposal on including SEZs under MAT could impact
earnings for FY12f/FY13f by c3%. However, the potential upside from docetaxel
(and other products in the JV’s pipeline) could have a net positive impact on
earnings. We raise our target multiple to 19x and our price target to INR840.
Upgrade to Add.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
With yesterday’s approval, generic Taxotere will soon find its way in
the CDH‐Hospira JV – marking the JV’s entry in the US region. With this
key launch, we raise our target multiple to 19x and raise our price
target to INR840. Upgrade to ADD.
Hospira (HSP US, NR) has received an approval from the US FDA to market
generic Taxotere (docetaxel), originally from the Sanofi‐Aventis (SNY US, NR)
stable. HSP had filed as a 505(b)(2). HSP will market in 20/80/160mg vials at
10mg/ml concentration.
The compound patent (including pediatric exclusivity) for Taxotere expired
in Nov10; the Orange Book lists at least 4 composition patents (expiring in
Jan13 and May14).
SNY recorded sales of EUR2.1bn from Taxotere in 2010, down 2.5% on a
reported basis; US sales at cUSD1.1bn in 2010 (EUR786mn, down 8% on
constant currency).
HSP’s approval follows a delay on labeling issues faced by HSP. HSP expects
to commercially launch the product later this month.
HSP‐CDH’s docetaxel offers additional user efficiency; while the original
product follows a two‐step process prior to infusion, HSP’s generic is
formulated as a single‐vial formulation, effectively reducing handling steps
in the preparation of the product. This product superiority is likely to help
retain market share as other generics enter the space. Sun Pharma (SUNP N,
NR) and Apotex have also filed 505 (b)(2) applications. Sandoz (NVS US, NR)
and Accord have filed ANDA applicants. SUNP’s 30‐month stay expires in
Jan12.
HSP already markets docetaxel in Europe and Australia. The product would
mark the JV’s entry in the US market.
Our FY11f estimates for CDH factor in cUSD2.5mn as sales to the US region
(total revenues under the JV for FY11f at INR2.3bn, CDH’s 50% share at
INR1.2bn). For FY12f, we assume JV sales at INR5bn (INR2.5bn as CDH’s
share).
Evolving model – mix of steady businesses and tapping new frontiers
CDH has been investing in business frontiers, including niche filings in US
generics, biologics and vaccines. While these investments are unlikely to
contribute to revenues over the medium term, steady delivery in key markets,
topped up by contribution from new revenue streams and better visibility on
the strength of the US pipeline, could support further re‐rating in the P/E. The
Union Budget FY12 proposal on including SEZs under MAT could impact
earnings for FY12f/FY13f by c3%. However, the potential upside from docetaxel
(and other products in the JV’s pipeline) could have a net positive impact on
earnings. We raise our target multiple to 19x and our price target to INR840.
Upgrade to Add.
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