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Sun Pharmaceutical Industries
Red Carpet for Docetaxel,
Retain OW
Quick comment: Sun Pharma got much awaited
approval for its NDA Docefrez injection (generic
docetaxel, US$1.2 bln brand sales) in the US market.
This is a major product catalyst for Sun Pharma for FY12,
given the large market size and low competitive intensity
due to high entry barriers.
Competitive landscape: Sun is the third entrant in the
market after Hospira (approved on March 8, 2011) and
authorized generic (Winthrop, entered just before
Hospira). In addition, three more players (including
Apotex and Sandoz) have been litigated and are in the
queue.
Legal scenario: To recap, Hospira and Apotex received
a favorable District Court ruling in September 2010
invalidating ‘512 and ‘561 patents. Innovator has
appealed the District Court decision. Sun has
challenged on the same patents and therefore enjoys
the District Court win (for details, refer to our note, ‘Sun
Pharmaceutical: Fielding Taxotere Questions, dated
Oct 11, 2010). Further, Apotex and Sandoz have been
litigated for other OB patents as well.
Economics: We expect Sun to launch the product soon.
For Sun, we have assumed a US$125 mln sales
opportunity for FY12 (with 50% price erosion and 20%
market share) and gradual buildup in competition. Sun
is disadvantaged vs. Hospira since its product is a
double-vial formulation and it is entering 6-8 weeks later
than Hospira.
Retain OW: We cite Sun’s earnings momentum,
mid-to-longer term Taro synergies and strong balance
sheet.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sun Pharmaceutical Industries
Red Carpet for Docetaxel,
Retain OW
Quick comment: Sun Pharma got much awaited
approval for its NDA Docefrez injection (generic
docetaxel, US$1.2 bln brand sales) in the US market.
This is a major product catalyst for Sun Pharma for FY12,
given the large market size and low competitive intensity
due to high entry barriers.
Competitive landscape: Sun is the third entrant in the
market after Hospira (approved on March 8, 2011) and
authorized generic (Winthrop, entered just before
Hospira). In addition, three more players (including
Apotex and Sandoz) have been litigated and are in the
queue.
Legal scenario: To recap, Hospira and Apotex received
a favorable District Court ruling in September 2010
invalidating ‘512 and ‘561 patents. Innovator has
appealed the District Court decision. Sun has
challenged on the same patents and therefore enjoys
the District Court win (for details, refer to our note, ‘Sun
Pharmaceutical: Fielding Taxotere Questions, dated
Oct 11, 2010). Further, Apotex and Sandoz have been
litigated for other OB patents as well.
Economics: We expect Sun to launch the product soon.
For Sun, we have assumed a US$125 mln sales
opportunity for FY12 (with 50% price erosion and 20%
market share) and gradual buildup in competition. Sun
is disadvantaged vs. Hospira since its product is a
double-vial formulation and it is entering 6-8 weeks later
than Hospira.
Retain OW: We cite Sun’s earnings momentum,
mid-to-longer term Taro synergies and strong balance
sheet.
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