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Ranbaxy Laboratories (RANB.BO) Rs458.00
Equity Research
MYL’s suit dismissed – NT hurdle to RBXY’s Lipitor launch removed
News
On the evening of May 2, the Federal judge of the District Court for the
District of Columbia dismissed Mylan’s petition which had sought to
pressurize the FDA into an early decision regarding the validity of
Ranbaxy’s exclusivity on generic Lipitor. (Refer our March 28th report,
Generic Lipitor: MYL’s motion for expedited hearing granted.)
While the details of the ruling are still awaited, this judgment eliminates
the near-term hurdle to the launch of Ranbaxy’s generic Lipitor on
November 30. This gives us more confidence in our base assumption of
generic Lipitor launch by Ranbaxy, discussed in our March 18 report,
Generic Lipitor – launch looming, dynamics far from clear with global stock
implications. We estimate an EPS contribution of Rs28.9 from this launch in
2011/2012, which implies a contribution of 31%/43% to our 2011E/2012E
EPS. We maintain our Neutral rating on the stock and our price target (our
NPV of Lipitor is Rs33 per share).
Analysis
The date certain November 30, 2011 launch of generic Lipitor will be the
largest generic drug launch ever with LTM sales of over US$9.5 bn. Ranbaxy
was the sole awardee of the 180-day exclusivity for generic Lipitor, but with
the FDA issues surrounding the import ban its ability to launch is a key topic of
debate. Another hurdle to Ranbaxy’s launch was Mylan filing a petition on
March 18 seeking an expedited decision regarding the validity of Ranbaxy’s
exclusivity with respect to its ANDA. With this hurdle removed, we think
that the probability of our base case materializing is higher.
Implications
We expect this development to reduce the near-tem overhang on the stock
and Ranbaxy’s launch now hinges on obtaining approval from the FDA.
Ranbaxy reports its 1Q2011 results on May 10 and will host its earnings call
on the same day. On the call we look for an update on progress with the
FDA and how Ranbaxy will be seeking to monetize the Lipitor opportunity.
INVESTMENT LIST MEMBERSHIP
Neutral
Coverage View: Neutral
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Ranbaxy Laboratories (RANB.BO) Rs458.00
Equity Research
MYL’s suit dismissed – NT hurdle to RBXY’s Lipitor launch removed
News
On the evening of May 2, the Federal judge of the District Court for the
District of Columbia dismissed Mylan’s petition which had sought to
pressurize the FDA into an early decision regarding the validity of
Ranbaxy’s exclusivity on generic Lipitor. (Refer our March 28th report,
Generic Lipitor: MYL’s motion for expedited hearing granted.)
While the details of the ruling are still awaited, this judgment eliminates
the near-term hurdle to the launch of Ranbaxy’s generic Lipitor on
November 30. This gives us more confidence in our base assumption of
generic Lipitor launch by Ranbaxy, discussed in our March 18 report,
Generic Lipitor – launch looming, dynamics far from clear with global stock
implications. We estimate an EPS contribution of Rs28.9 from this launch in
2011/2012, which implies a contribution of 31%/43% to our 2011E/2012E
EPS. We maintain our Neutral rating on the stock and our price target (our
NPV of Lipitor is Rs33 per share).
Analysis
The date certain November 30, 2011 launch of generic Lipitor will be the
largest generic drug launch ever with LTM sales of over US$9.5 bn. Ranbaxy
was the sole awardee of the 180-day exclusivity for generic Lipitor, but with
the FDA issues surrounding the import ban its ability to launch is a key topic of
debate. Another hurdle to Ranbaxy’s launch was Mylan filing a petition on
March 18 seeking an expedited decision regarding the validity of Ranbaxy’s
exclusivity with respect to its ANDA. With this hurdle removed, we think
that the probability of our base case materializing is higher.
Implications
We expect this development to reduce the near-tem overhang on the stock
and Ranbaxy’s launch now hinges on obtaining approval from the FDA.
Ranbaxy reports its 1Q2011 results on May 10 and will host its earnings call
on the same day. On the call we look for an update on progress with the
FDA and how Ranbaxy will be seeking to monetize the Lipitor opportunity.
INVESTMENT LIST MEMBERSHIP
Neutral
Coverage View: Neutral
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