Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
G o o d s h o w d u r i n g t o u g h t i m e s …
May was full of corporate results and almost all of them were above
expectations on account of new product launches and traction from
either of the geographies. Most of the companies registered higher sales
during the March quarter and were able to fathom the margin pressure,
which affected other sectors adversely. Among all, Cadila was the
standout performer for the March quarter clocking robust sales growth
enabled by strong US and domestic growth and product rollout by
Hospira JV. Sun continued its solid run on account of better-thanexpected Taro numbers. While Lupin’s numbers were a positive surprise,
DRL disappointed on account of muted guidance despite steady
numbers. Ranbaxy and Cipla did not disappoint either. Glenmark
observed some negative structural changes on account of IFRS adoption
but continued to show momentum in the US and domestic market.
Aurobindo continued to deliver good numbers on account of strong
growth in the US. Divi’s registered strong growth for the second
consecutive quarter, indicating a revival in the CRAMS segment. Ipca
registered strong numbers backed by exports although domestic growth
was muted. Only smaller players such as Unichem and Torrent delivered
subdued numbers during the March quarter.
Glenmark received a booster for its R&D pipeline when Sanofi agreed to
pay US$50 million upfront for the development and commercialisation of
monoclonal antibody GBR 500 for the treatment of Crohn’s and
inflammatory diseases. It was the first new biological entity (NBE) by an
Indian company to go for further development. JB Chemicals sold its
Russian brands including flagship cough syrup ‘Doktor Mom’ to J&J for
US$260 million, a deal valued at ~5x the brand sales. Shares of
Aurobindo came under some pressure after it formally received the
warning letter from the USFDA for unit VI for which the import ban was
imposed in February. Another negative surprise was Piramal
Healthcare’s financial foray. During the month, both Aurobindo and
Jubilant Life redeemed FCCBs close to US$200 million as per schedule.
On the domestic front, GlaxoSmithKline’s Augmentin continued to be
India’s best selling drug. As per latest IMS MAT data, the annual sales of
Augmentin is around | 244 crore. Abbott ranked No. 1 in terms of market
share. The market share of Abbott is 6.8% followed by Cipla at 5.2% and
Ranbaxy at 4.6%.
S e c t o r v i e w
In May, the BSE Healthcare index outperformed the broader market on
account of relatively stronger quarterly numbers by almost all
constituents of the index. The sector was one of the better performers of
the universe and was able to withstand crude shock and inflationary
pressure. We expect this trend to continue, going ahead, as more
investors will scout for defensive bets amid strong headwinds in the
form of inflation and higher interest rates. Good traction from the US,
Japan and other developed markets supported by product approvals, a
growing presence in Pharmerging markets and a strong foothold in India
are some additional aspects that will continue to weigh on the relative
outperformance vis-à-vis broader markets.
Regulatory approvals
Aurobindo gets TGA approval for two drugs
Aurobindo Pharma has received marketing approval for two drugs from
Therapeutic Goods Administration (TGA), Government of Australia. It has
received approval for Risperidone in both tablets and oral solution forms.
Risperidone Tablets and Oral Solution are indicated in the treatment
schizophrenia and falls under the neurological (CNS) segment.
Alendronate tablets are indicated for the treatment and prevention of
osteoporosis. Risperidone products have a market size of approximately
US$27.5 million while for Alendronate it is US$14 million for the 12
months ending September 2010 according to IMS. Aurobindo now has
eight approvals from TGA, Australia.
USFDA grants approval for Aurobindo’s Donepezil Hydrochloride tablets
Aurobindo Pharma has received final approval for its ANDA of Donepezil
Hydrochloride Tablets 5 mg and 10 mg from the USFDA. The drug is the
generic version of Aricept tablets of Eisai Medical Research Inc, used for
the treatment of mild, moderate, and severe dementia of the Alzheimer's
type and fall under the central nervous system (CNS) therapeutic
segment. The product has a market size of approximately US$2.5 billion
for the 12 months ending September 2010 according to IMS. The
company is planning to launch the drug in the US market shortly.
Aurobindo Pharma gets USFDA approval for generic Zosyn injection
Aurobindo Pharma has received final approval from the USFDA to
manufacture and market Piperacillin and Tazobactam for injection 2.25 g,
3.375 g and 4.5 g, packaged in single use vials. Piperacillin and
Tazobactam injection is the generic equivalent of Wyeth’s Zosyn
injection. It consists of semi-synthetic penicillin and a beta-lactamase
inhibitor, which is used for the treatment of moderate to severe bacterial
infections. The market size of the drug is approximately US$635 million
for the 12 months ending September 2010. Aurobindo Pharma is the
third generic player to get approval for the drug. It is planning to launch
the drug shortly.
Cadila receives final approval for Donepezil Hydrochloride
Cadila Healthcare has received final approval for ANDA from the USFDA
for the Donepezil Hydrochloride 5 mg and 10 mg tablets. The drug was
developed by Eisai Pharmaceuticals and co-promoted with Pfizer Inc.
The drug is indicated for treatment of dementia of Alzheimer’s disease.
According to IMAS MAT September 2010, total annual sales for Aricept 5
mg and 10 mg tablets were $2.5 billion. Ranbaxy was first to launch the
generic Aricept in the US healthcare system (granted 180-day sole
marketing exclusivity) in November 2010.
Cadila gets USFDA nod for generic Clarinex
Cadila Healthcare has received final approval from the USFDA for its
ANDA of Desloratadine 5 mg tablets. The drug is the generic version of
Schering Plough’s Clarinex and is used to treat seasonal allergic rhinitis
and perennial allergic rhinitis.
Cipla gets USFDA tentative nod for HIV drug
Cipla has received tentative approval for a fixed dose combination tablet
containing 60 mg abacavir sulphate and 30 mg lamivudine for the
treatment of HIV in children aged three months and older. It received
approval under US President’s Emergency Plan for AIDS relief.
Ranbaxy gets final approval for Neproxen Sodium from USFDA
Ranbaxy Laboratories has received final approval from the USFDA for
Neproxen Sodium EQ 200 mg base over-the-counter tablets used for
pain management. It was originally developed and marketed by Roche
under the brand name drug Anaprox. Dr Reddy's Laboratories and
Sandoz have already received the final approval in the same category.
Strides gets USFDA nod for anaesthetic drug
Strides Arcolab has received USFDA approval for Midazolam injection
USP, 1 mg/ml packaged in 10 mg/10ml multiple-dose vials and 5 mg/ml
packaged in 25 mg/5ml and 50 mg/ 10ml multiple-dose vials. Midazolam,
a general anaesthetic, is offered as a sterile, non-pyrogenic parenteral
dosage form for intravenous or intramuscular injections. According to
IMS September 2010 data, the total market for Midazolam in the US is
approximately US$ 51 million.
Sun Pharma gets USFDA approval for Docefrez injection
Sun Pharmaceuticals has obtained USFDA approval for its new drug
application or NDA for Docefrez (docetaxel) for injection, 20 mg/vial and
80 mg/vial. This NDA provides for the use of Docefrez (docetaxel) for
injection, 20 mg/vial and 80 mg/vial for locally advanced or metastatic
breast cancer, locally advanced or metastatic non-small cell lung cancer
and hormone refractory metastatic prostate cancer. The company has
launched the drug in US market
Sun’s subsidiary gets USFDA approval for Cetirizine hydrochloride
Sun Pharma’s subsidiary Taro Pharmaceutical Industries has received
approval from the USFDA for Cetirizine Hydrochloride Oral Solution, 1
mg/ml (sugar free bubble gum). Taro's Cetirizine Oral Solution is an overthe-counter antihistamine used for the relief of sneezing, runny nose,
itchy, watery eyes and itchy throat or nose due to indoor and outdoor
allergies and for the relief of itching due to hives and is bioequivalent to
children's Zyrtec Syrup. Zyrtec is a registered trademark of Johnson &
Johnson.
Domestic pharma industry
Augmentin continues to be largest selling drug in India
Widely used anti-bacterial drug Augmentin continue to be the largest
selling drug in the overall domestic retail market while multinational
company Abbott leapt to the top position with the largest market share
for a 12-month period ending April 2011. While Augmentin
(manufactured by GSK), with sales of | 244 crore, was the largest selling
drug brand, Abbott led the pack with a share of 6.8%, during the period,
data from market consultancy, IMS showed. In the revised methodology,
IMS has now included hospital and doctors' sales to the retail segment,
for a more comprehensive industry picture. For the same period, the
market was valued at | 57,466 crore, with a growth of over 15%. The
industry growth for April 2011 at 16.6% was healthy and in line with the
consensus forecast of a CAGR between 15% and 17% over the next five
years (2010–2015). The hospital sector continues to grow strongly (29%
growth for April 2011) and is expected to further accelerate the market
growth, going forward, with more players entering this segment.
Augmentin, buoyed by its strong presence in the hospital segment,
toppled the erstwhile leader Corex (cough and cold preparation), which
had been topping the charts for the last few years. Augmentin was
followed by Corex and anti diabetic therapy Human Mixard 30/70.
Human Mixard and Monocef clocked the highest growth during the 12-
month period, while Phensedyl Cough and Corex posted the lowest
growth among the top 10 brands.
Financial Results
Strong US numbers boosts Aurobindo sales
Aurobindo’s net sales increased by 26% to | 1154.4 crore on the back of
robust growth in the US business and ARV (formulation) business. The
sales in the US market increased by 51% YoY to | 349.8 crore despite an
import alert imposed by USFDA on Unit VI. Revenues from the ARV
business increased 35% to | 183.3 crore. EBITDA margins increased only
22 bps YoY to 18.7%. EBITDA increased by 27.7% YoY to | 214 crore.
The growth in net profit was restricted to 12% to | 125 crore due to
lower forex gain and EO expenses. In FY11, it filed 37 ANDAs and
received approvals for 23 ANDAs include four tentative approvals.
Launch of Docetaxel in US market boosts Cadila net profit
Cadila Healthcare’s total revenues grew 43.2% YoY to | 1168.7 crore
mainly driven by higher revenues from the US and Zydus Hospira JV.
EBITDA margins declined ~360 bps YoY to 18.8% due to higher raw
material and employee cost. Despite a fall in EBITDA margins, net profit
witnessed a rapid growth of 51% to | 179 crore mainly on account of
forex gain of | 16 crore and lower taxation. Hospira has launched
docetaxel (Oncology) in the US market on March 17, 2010, which was
supplied by the Zydus Hospira JV. The JV recorded sales of | 133 crore
and net profit of | 91.2 crore.
Cipla net profit down 22%
Cipla registered 21% growth in net sales to | 1615 crore for the quarter
ended March 2011 on the back of 28% growth in export business to |
975 crore. However, EBITDA margins declined 70 bps YoY to 18.1% due
to higher factory overheads at Indore SEZ. The net profit declined 22%
YoY due to EO income of | 95 crore in Q4FY10. The company added 500
medical representatives during FY11.
Dishman Pharma continues to post poor results
Dishman Pharmaceutical registered sales growth of 19% for the quarter
ended March 2011 to | 420 crore. EBITDA margins sharply declined by
970 bps YoY due to execution of all lower margins contracts by
outsourcing them and continued poor performance in Carbogen Amcis.
Net profit declined by 44% to | 40 crore.
Divi’s Laboratories posts strong set of numbers for Q4FY11
Divi's Laboratories came out with a strong financial performance for the
quarter ended March, 2011. Its sales grew 52% YoY to | 479 crore.
EBITDA margins were declined by 800 bps on account of a rise in
consumption cost and manufacturing expenses. Finally, net profit grew
by 35% to | 175 crore.
Dr Reddy’s cuts guidance to US$2.7 billion for FY13 from US$3 billion
The net sales for the quarter ended March 2011 increased by 23% to |
2017 crore driven by revenues from North America generic business,
which grew by 68% YoY to | 590 crore. Operating PBIT margins
increased by 840 bps YoY to 30.4% on the back of the launch of higher
margin and limited competition product fexofenadine pseudoephedrine
180/240 mg. The net profit increased by 58% to | 307 crore YoY. The
company filed 20 ANDAs with the USFDA. The cumulative ANDA filings
as of March 31, 2011 are 170. The company launched 11 products during
the year, which includes key products like tacrolimus, lansoprazole and
fesofenadine pseudoephedrine. It launched 48 products in the domestic
markets including darbepoetin alfa biosimilar in FY11. The company has
reduced its FY13 guidance from US$3 billion to US$2.7 billion.
One-time expenses hit GSK profit
GlaxoSmithKline reported a net profit of | 0.46 crore for the quarter
ended March 2011 despite 12% growth in net sales due to EO expenses.
Total income from operations increased by 12% to | 610 crore. EBITDA
margins declined marginally by 210 bps YoY to 35.7% due to a change in
the product mix. EBITDA grew by 5% to | 218 crore. The company
provided one-time expenses of |186 crore for pricing of drugs, interest
claim and tax. The net profit stood at | 0.46 crore as against | 161 crore.
Elder Pharma’s Q4FY11 sales on a comparable basis grew 17%
Elder Pharmaceuticals’ results are not comparable both YoY and QoQ as
it increased it stake in Biomeda and completed the acquisition of
NeutraHealth. The net sales increased by 59.6% YoY to | 302.7 crore.
The combined sales of Biomeda and NeutraHealth during the quarter
was | 80.9 crore. Excluding this, base business grew by 16.9% YoY to |
221.8 crore. The growth in sales was mainly driven by women’s
healthcare and neutraceuticals segments. EBITDA margins declined 116
bps YoY to 17.8% were on the back of consolidation of low margins
business. EBITDA grew by 49.3% to | 51 crore. Despite a robust 49%
growth at the EBITDA level, the net profit grew a mere 3% to | 17 crore
on the back of an increase in the depreciation and interest cost. The
company is planning to launch 13-15 products in FY12.
Ipca’s net profit grow 57% YoY
Ipca's Q4FY11 net sales increased by 30% YoY to | 478.5 crore mainly
driven by robust growth in the export formulation business, which went
up by 73.5% to | 227.4 crore. With the increase in proposition of
formulation sales in the total sales, EBITDA margins improved 210 bps to
20.5%. The net profit grew 57% to | 58.6 crore.
Jubilant plans to spend | 500 crore capex for FY12
Jubilant Life Sciences posted a 55% drop in March quarter consolidated
profit but expects to post robust revenue growth and operating profits in
FY12 on higher capacity utilisation and expansion into new geographies.
The firm posted a net profit of | 61.72 crore while net sales fell by a tenth
to | 890 crore. The firm has planned capex of | 500 crore for FY12 to
drive growth and its proposed expansion is likely to generate revenue of
more than | 1200 crore at full capacity utilisation.
Lupin’s net sales up 17.5% YoY, boosted by Japanese business
Lupin's Q4FY11 net sales increased by 17.5% YoY to | 1511.5 crore on
the back of strong growth from Japan, emerging markets and the US
branded business in particular. EBITDA margins declined 200 bps to 20%
due to higher R&D cost, higher API sales and incremental overheads at
the Indore SEZ. Lupin registered good growth in all major geographies
including the US, which was least expected. Lower other income and
higher interest outgo restricted the net profit growth to 3% YoY to |
227.20 crore.
Natco net profit declines 4% YoY
Natco Pharma’s net profit for the March quarter declined 4% to | 14.38
crore. Total income for the quarter stood at |115.30 crore as against
|127.38 crore for the corresponding quarter last year
Opto’s net sales grow 12% on a like to like basis
Opto Circuit’s net sales grew 63% YoY to | 544.5 crore for the March
quarter. On a like-to-like basis, sales grew by 12% to | 373 crore. During
the quarter its subsidiary Cardiac Science (CSC) posted sales of ~ | 171
crore and net profit of ~| 18.9 crore. EBITDA margins declined ~1130
bps YoY to 22% due to consolidation of CSC. EBITDA grew by 7.3% to |
119 crore. Despite marginal growth in EBITDA, the net profit grew by
69% YoY to | 111 crore on the back forex gains and lower taxation.
Orchid posts net profit of | 156 crore for FY11
Orchid Chemicals and Pharmaceuticals posted a net profit of | 156.19
crore during the year ended March 2011 as against | 339.25 crore in the
previous year. The figures are not comparable as the company
transferred its injectable formulation business to Hospira in March 2010.
Last year’s net profit was mainly due to extraordinary item of | 884.72
crore. Before this adjustment, Orchid was incurring a loss of | 545.46
crore in 2009-10.
Continuing businesses of Piramal Healthcare grow 38% YoY
Piramal Healthcare's (PHL) Q4FY11 results are not comparable YoY as it
sold its domestic pharma business and diagnostic business to Abbott
and SRL, respectively. On a like-to-like basis, the continued business
posted sales growth of 38% YoY driven by strong growth in CRAMS and
critical care segments. Net profit stood at | 201.8 crore as against | 0.2
crore in Q4FY11. PHL has decided to enter the financial services
business. The company is planning to set up an NBFC for lending to
infrastructure and other sectors. Beside this, it is also entering into fund
management in the real estate and infrastructure sector.
Ranbaxy’s profit declines on a higher base
Ranbaxy Laboratories’ quarterly profit fell 68%, mainly because limited
competition in drug sales boosted the figures compared to a year earlier.
However, the drop was lower than Street forecasts. Net sales for the
three-month period fell 13.6% from a year ago to | 2,143 crore.
Ranbaxy’s sales from overseas markets, which account for the bulk of
the revenues, were down 19% to | 1,698 crore. Its sales from the
domestic market rose 18.5% to | 448.91 crore. North America fell 8.8%
YoY to | 701.8 crore as the year-ago quarter was boosted by sales from a
limited competition drug.
Sun Pharma registers strong sales boosted by Taro
Sun Pharmaceuticals posted a strong performance in Q4FY11 on the
back of an improved performance from Taro Pharmaceutical. The results
are not comparable YoY due to consolidation of Taro Pharmaceuticals.
Net sales increased by 35.5% YoY to | 1463.3 crore. Excluding Taro’s
numbers, sales declined 9% YoY on a higher base. EBITDA margins
declined 843 bps YoY on account of a higher spend on corrective
measures at Caraco's Detroit facility and Sun's New Jersey facility. Net
profit grew by 12.2% to | 442.8 crore.
Torrent Pharma’s net profit declines 28% YoY
Torrent Pharma's Q4FY11 revenues grew 11% to | 526.4 crore as the
company provided charge back of | 28 crore in the US market. EBITDA
margins declined ~810 bps YoY to 12.3% due to charge back provision
and higher SGA expenses due to an increase in the field force. The
EBITDA declined by 33% YoY to | 64.5. Net profit witnessed de-growth
of 28% YoY to | 42.8 crore.
Unichem posts 3% growth in net sales for Q4FY11
Unichem Laboratories' Q4FY11 numbers were below our expectations.
Total revenues on a standalone basis grew just 3% YoY to | 178.1 crore
due to de-growth in the domestic formulation business and export API
business. EBITDA margins declined sharply by ~1060 bps to 13.3% due
to increase in overheads on account of new addition of 600 odd medical
representatives, commissioning of new manufacturing facilities at Baddi
and Sikkim, higher raw materials cost and higher marketing expenses.
Net profit declined by 56% YoY to | 18.6 crore.
M&A, demergers & JVs
JB Chemicals to sell OTC brands for US$260 million
JB Chemicals & Pharmaceuticals (JBCPL) has agreed to sell its over-thecounter Russian brands to Johnson & Johnson (J&J) for about US$260
million. The deal, expected to get closed by the middle of this year, is
being struck through J&J’s wholly-owned Cilag GmbH International. The
company’s board has also approved the sale of worldwide rights and
registrations of three over-the-counter (OTC) brands — Doktor Mom,
Rinza (the No. 1 and No. 2 cough and cold brands in Russia) and Fitovit.
The sale will also involve the transfer of employees, inventory and
receivables of the Russia/CIS OTC business. Doktor Mom has annual
sales of about | 200 crore in Russia and CIS countries (~35% of JBCPL’s
sales).
Piramal Life Sciences’ NCE unit to merge with Piramal Healthcare
The boards of Piramal Healthcare (PHL) and Piramal Life Sciences (PLSL)
considered and approved the scheme of arrangement between PLSL and
PHL. Under the proposed de-merger scheme, the new chemical entity
(NCE) division of PLSL would be de-merged and merged to PHL from
April with effect from April 1, 2011. Each shareholder of PLSL will be
entitled to one fully paid up equity share of | 2 of PHL for every four
equity shares of | 10 each held in PLSL. All assets and liabilities of the
NCE division will be transferred to PHL at book value. The entire process
is expected to get completed in six months. Total 24 molecules are in the
development pipeline.
IP issues
Glenmark settles patent litigation with Triax Pharma, Astellas Pharma
Glenmark Pharmaceuticals has entered into a settlement and license
agreement with Triax Pharmaceuticals, LLC, Astellas Pharma Europe BV
and Astellas Pharma International to resolve a US patent infringement
suit related to Glenmark’s filing of an ANDA for 0.1% hydrocortisone
butyrate cream. The drug is the generic version of Locoid Lipocream.
According to IMS Health data, for 2010, Locoid Lipocream achieved sales
of approximately US$38 million.
Glenmark resolves patent litigation with Nycomed
Glenmark Pharmaceuticals has entered into a settlement and license
agreement with Nycomed to resolve the patent infringement lawsuit
regarding Glenmark's ANDA for Fluticasone Propionate 0.05% Lotion.
The cream is a generic version of Cutivate. Under the terms of the
settlement agreement, the company will be able to market and distribute
its Fluticasone Propionate Lotion under a royalty-bearing license from
Nycomed US in March 2012, or earlier in certain circumstances.
Glenmark has filed the ANDA with Para IV and holds 180 days of
exclusivity for the cream. As per IMS Health sales data, Cutivate
(Fluticasone Propionate) 0.05% Lotion clocked sales of around $48
million in the US for the year ended 2010.
'
Medicines sues Dr Reddy’s over drug Bivalirudin
US based Medicines’ has filed a suit against Dr Reddy’s laboratories in
US court related patent infringement. Dr Reddy’s has filed an ANDA for
seeking approval for the generic version of Bivalirudin, which is used as
an anti-coagulant for patients with unstable angina undergoing
percutaneous tranluminal coronary angioplasty. The innovator markets
the drug under the brand name of Angiomax. The market size of
Angiomax would be around US$400 million.
Sun Pharma wins patent litigation against Eli Lilly for Gemzar
The US Supreme Court rejected an Eli Lilly & Co. appeal seeking to save
the drug maker's patent for anti-cancer drug Gemzar. The case involved a
challenge to the patent by Sun Pharmaceutical Industries. The
invalidated patent would have extended Lilly's marketing exclusivity for
Gemzar into 2013. Lilly has argued that the Gemzar patent, which dealt
with anti-cancer uses for the drug, should have been honoured because
the earlier patent dealt only with anti-viral uses. Sun Pharma has said
Lilly did not deserve a second patent to extend its Gemzar monopoly
because the anti-viral uses Lilly claimed in the first patent never proved
viable. Gemzar, whose chemical name is gemcitabine, generated US
sales of US$723 million.
Other development
Aurobindo repurchases all its outstanding FCCBs
Aurobindo Pharma has repurchased and cancelled all its outstanding
FCCBs. The company has paid an aggregate amount of US$203.86
million including premium for both aforesaid tranches. The company has
paid 50% through cash and 50% through FCNR (B) route.
Jubilant repays FCCBs worth US$202 million
Jubilant Life Sciences has repaid FCCBs worth US$202 million including
YTM of US$60 million. With this repayment, no more FCCBs are
outstanding on the books. The company has repaid all outstanding
FCCBs on time, as per schedule, in line with the terms and conditions of
the FCCB instruments.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
G o o d s h o w d u r i n g t o u g h t i m e s …
May was full of corporate results and almost all of them were above
expectations on account of new product launches and traction from
either of the geographies. Most of the companies registered higher sales
during the March quarter and were able to fathom the margin pressure,
which affected other sectors adversely. Among all, Cadila was the
standout performer for the March quarter clocking robust sales growth
enabled by strong US and domestic growth and product rollout by
Hospira JV. Sun continued its solid run on account of better-thanexpected Taro numbers. While Lupin’s numbers were a positive surprise,
DRL disappointed on account of muted guidance despite steady
numbers. Ranbaxy and Cipla did not disappoint either. Glenmark
observed some negative structural changes on account of IFRS adoption
but continued to show momentum in the US and domestic market.
Aurobindo continued to deliver good numbers on account of strong
growth in the US. Divi’s registered strong growth for the second
consecutive quarter, indicating a revival in the CRAMS segment. Ipca
registered strong numbers backed by exports although domestic growth
was muted. Only smaller players such as Unichem and Torrent delivered
subdued numbers during the March quarter.
Glenmark received a booster for its R&D pipeline when Sanofi agreed to
pay US$50 million upfront for the development and commercialisation of
monoclonal antibody GBR 500 for the treatment of Crohn’s and
inflammatory diseases. It was the first new biological entity (NBE) by an
Indian company to go for further development. JB Chemicals sold its
Russian brands including flagship cough syrup ‘Doktor Mom’ to J&J for
US$260 million, a deal valued at ~5x the brand sales. Shares of
Aurobindo came under some pressure after it formally received the
warning letter from the USFDA for unit VI for which the import ban was
imposed in February. Another negative surprise was Piramal
Healthcare’s financial foray. During the month, both Aurobindo and
Jubilant Life redeemed FCCBs close to US$200 million as per schedule.
On the domestic front, GlaxoSmithKline’s Augmentin continued to be
India’s best selling drug. As per latest IMS MAT data, the annual sales of
Augmentin is around | 244 crore. Abbott ranked No. 1 in terms of market
share. The market share of Abbott is 6.8% followed by Cipla at 5.2% and
Ranbaxy at 4.6%.
S e c t o r v i e w
In May, the BSE Healthcare index outperformed the broader market on
account of relatively stronger quarterly numbers by almost all
constituents of the index. The sector was one of the better performers of
the universe and was able to withstand crude shock and inflationary
pressure. We expect this trend to continue, going ahead, as more
investors will scout for defensive bets amid strong headwinds in the
form of inflation and higher interest rates. Good traction from the US,
Japan and other developed markets supported by product approvals, a
growing presence in Pharmerging markets and a strong foothold in India
are some additional aspects that will continue to weigh on the relative
outperformance vis-à-vis broader markets.
Regulatory approvals
Aurobindo gets TGA approval for two drugs
Aurobindo Pharma has received marketing approval for two drugs from
Therapeutic Goods Administration (TGA), Government of Australia. It has
received approval for Risperidone in both tablets and oral solution forms.
Risperidone Tablets and Oral Solution are indicated in the treatment
schizophrenia and falls under the neurological (CNS) segment.
Alendronate tablets are indicated for the treatment and prevention of
osteoporosis. Risperidone products have a market size of approximately
US$27.5 million while for Alendronate it is US$14 million for the 12
months ending September 2010 according to IMS. Aurobindo now has
eight approvals from TGA, Australia.
USFDA grants approval for Aurobindo’s Donepezil Hydrochloride tablets
Aurobindo Pharma has received final approval for its ANDA of Donepezil
Hydrochloride Tablets 5 mg and 10 mg from the USFDA. The drug is the
generic version of Aricept tablets of Eisai Medical Research Inc, used for
the treatment of mild, moderate, and severe dementia of the Alzheimer's
type and fall under the central nervous system (CNS) therapeutic
segment. The product has a market size of approximately US$2.5 billion
for the 12 months ending September 2010 according to IMS. The
company is planning to launch the drug in the US market shortly.
Aurobindo Pharma gets USFDA approval for generic Zosyn injection
Aurobindo Pharma has received final approval from the USFDA to
manufacture and market Piperacillin and Tazobactam for injection 2.25 g,
3.375 g and 4.5 g, packaged in single use vials. Piperacillin and
Tazobactam injection is the generic equivalent of Wyeth’s Zosyn
injection. It consists of semi-synthetic penicillin and a beta-lactamase
inhibitor, which is used for the treatment of moderate to severe bacterial
infections. The market size of the drug is approximately US$635 million
for the 12 months ending September 2010. Aurobindo Pharma is the
third generic player to get approval for the drug. It is planning to launch
the drug shortly.
Cadila receives final approval for Donepezil Hydrochloride
Cadila Healthcare has received final approval for ANDA from the USFDA
for the Donepezil Hydrochloride 5 mg and 10 mg tablets. The drug was
developed by Eisai Pharmaceuticals and co-promoted with Pfizer Inc.
The drug is indicated for treatment of dementia of Alzheimer’s disease.
According to IMAS MAT September 2010, total annual sales for Aricept 5
mg and 10 mg tablets were $2.5 billion. Ranbaxy was first to launch the
generic Aricept in the US healthcare system (granted 180-day sole
marketing exclusivity) in November 2010.
Cadila gets USFDA nod for generic Clarinex
Cadila Healthcare has received final approval from the USFDA for its
ANDA of Desloratadine 5 mg tablets. The drug is the generic version of
Schering Plough’s Clarinex and is used to treat seasonal allergic rhinitis
and perennial allergic rhinitis.
Cipla gets USFDA tentative nod for HIV drug
Cipla has received tentative approval for a fixed dose combination tablet
containing 60 mg abacavir sulphate and 30 mg lamivudine for the
treatment of HIV in children aged three months and older. It received
approval under US President’s Emergency Plan for AIDS relief.
Ranbaxy gets final approval for Neproxen Sodium from USFDA
Ranbaxy Laboratories has received final approval from the USFDA for
Neproxen Sodium EQ 200 mg base over-the-counter tablets used for
pain management. It was originally developed and marketed by Roche
under the brand name drug Anaprox. Dr Reddy's Laboratories and
Sandoz have already received the final approval in the same category.
Strides gets USFDA nod for anaesthetic drug
Strides Arcolab has received USFDA approval for Midazolam injection
USP, 1 mg/ml packaged in 10 mg/10ml multiple-dose vials and 5 mg/ml
packaged in 25 mg/5ml and 50 mg/ 10ml multiple-dose vials. Midazolam,
a general anaesthetic, is offered as a sterile, non-pyrogenic parenteral
dosage form for intravenous or intramuscular injections. According to
IMS September 2010 data, the total market for Midazolam in the US is
approximately US$ 51 million.
Sun Pharma gets USFDA approval for Docefrez injection
Sun Pharmaceuticals has obtained USFDA approval for its new drug
application or NDA for Docefrez (docetaxel) for injection, 20 mg/vial and
80 mg/vial. This NDA provides for the use of Docefrez (docetaxel) for
injection, 20 mg/vial and 80 mg/vial for locally advanced or metastatic
breast cancer, locally advanced or metastatic non-small cell lung cancer
and hormone refractory metastatic prostate cancer. The company has
launched the drug in US market
Sun’s subsidiary gets USFDA approval for Cetirizine hydrochloride
Sun Pharma’s subsidiary Taro Pharmaceutical Industries has received
approval from the USFDA for Cetirizine Hydrochloride Oral Solution, 1
mg/ml (sugar free bubble gum). Taro's Cetirizine Oral Solution is an overthe-counter antihistamine used for the relief of sneezing, runny nose,
itchy, watery eyes and itchy throat or nose due to indoor and outdoor
allergies and for the relief of itching due to hives and is bioequivalent to
children's Zyrtec Syrup. Zyrtec is a registered trademark of Johnson &
Johnson.
Domestic pharma industry
Augmentin continues to be largest selling drug in India
Widely used anti-bacterial drug Augmentin continue to be the largest
selling drug in the overall domestic retail market while multinational
company Abbott leapt to the top position with the largest market share
for a 12-month period ending April 2011. While Augmentin
(manufactured by GSK), with sales of | 244 crore, was the largest selling
drug brand, Abbott led the pack with a share of 6.8%, during the period,
data from market consultancy, IMS showed. In the revised methodology,
IMS has now included hospital and doctors' sales to the retail segment,
for a more comprehensive industry picture. For the same period, the
market was valued at | 57,466 crore, with a growth of over 15%. The
industry growth for April 2011 at 16.6% was healthy and in line with the
consensus forecast of a CAGR between 15% and 17% over the next five
years (2010–2015). The hospital sector continues to grow strongly (29%
growth for April 2011) and is expected to further accelerate the market
growth, going forward, with more players entering this segment.
Augmentin, buoyed by its strong presence in the hospital segment,
toppled the erstwhile leader Corex (cough and cold preparation), which
had been topping the charts for the last few years. Augmentin was
followed by Corex and anti diabetic therapy Human Mixard 30/70.
Human Mixard and Monocef clocked the highest growth during the 12-
month period, while Phensedyl Cough and Corex posted the lowest
growth among the top 10 brands.
Financial Results
Strong US numbers boosts Aurobindo sales
Aurobindo’s net sales increased by 26% to | 1154.4 crore on the back of
robust growth in the US business and ARV (formulation) business. The
sales in the US market increased by 51% YoY to | 349.8 crore despite an
import alert imposed by USFDA on Unit VI. Revenues from the ARV
business increased 35% to | 183.3 crore. EBITDA margins increased only
22 bps YoY to 18.7%. EBITDA increased by 27.7% YoY to | 214 crore.
The growth in net profit was restricted to 12% to | 125 crore due to
lower forex gain and EO expenses. In FY11, it filed 37 ANDAs and
received approvals for 23 ANDAs include four tentative approvals.
Launch of Docetaxel in US market boosts Cadila net profit
Cadila Healthcare’s total revenues grew 43.2% YoY to | 1168.7 crore
mainly driven by higher revenues from the US and Zydus Hospira JV.
EBITDA margins declined ~360 bps YoY to 18.8% due to higher raw
material and employee cost. Despite a fall in EBITDA margins, net profit
witnessed a rapid growth of 51% to | 179 crore mainly on account of
forex gain of | 16 crore and lower taxation. Hospira has launched
docetaxel (Oncology) in the US market on March 17, 2010, which was
supplied by the Zydus Hospira JV. The JV recorded sales of | 133 crore
and net profit of | 91.2 crore.
Cipla net profit down 22%
Cipla registered 21% growth in net sales to | 1615 crore for the quarter
ended March 2011 on the back of 28% growth in export business to |
975 crore. However, EBITDA margins declined 70 bps YoY to 18.1% due
to higher factory overheads at Indore SEZ. The net profit declined 22%
YoY due to EO income of | 95 crore in Q4FY10. The company added 500
medical representatives during FY11.
Dishman Pharma continues to post poor results
Dishman Pharmaceutical registered sales growth of 19% for the quarter
ended March 2011 to | 420 crore. EBITDA margins sharply declined by
970 bps YoY due to execution of all lower margins contracts by
outsourcing them and continued poor performance in Carbogen Amcis.
Net profit declined by 44% to | 40 crore.
Divi’s Laboratories posts strong set of numbers for Q4FY11
Divi's Laboratories came out with a strong financial performance for the
quarter ended March, 2011. Its sales grew 52% YoY to | 479 crore.
EBITDA margins were declined by 800 bps on account of a rise in
consumption cost and manufacturing expenses. Finally, net profit grew
by 35% to | 175 crore.
Dr Reddy’s cuts guidance to US$2.7 billion for FY13 from US$3 billion
The net sales for the quarter ended March 2011 increased by 23% to |
2017 crore driven by revenues from North America generic business,
which grew by 68% YoY to | 590 crore. Operating PBIT margins
increased by 840 bps YoY to 30.4% on the back of the launch of higher
margin and limited competition product fexofenadine pseudoephedrine
180/240 mg. The net profit increased by 58% to | 307 crore YoY. The
company filed 20 ANDAs with the USFDA. The cumulative ANDA filings
as of March 31, 2011 are 170. The company launched 11 products during
the year, which includes key products like tacrolimus, lansoprazole and
fesofenadine pseudoephedrine. It launched 48 products in the domestic
markets including darbepoetin alfa biosimilar in FY11. The company has
reduced its FY13 guidance from US$3 billion to US$2.7 billion.
One-time expenses hit GSK profit
GlaxoSmithKline reported a net profit of | 0.46 crore for the quarter
ended March 2011 despite 12% growth in net sales due to EO expenses.
Total income from operations increased by 12% to | 610 crore. EBITDA
margins declined marginally by 210 bps YoY to 35.7% due to a change in
the product mix. EBITDA grew by 5% to | 218 crore. The company
provided one-time expenses of |186 crore for pricing of drugs, interest
claim and tax. The net profit stood at | 0.46 crore as against | 161 crore.
Elder Pharma’s Q4FY11 sales on a comparable basis grew 17%
Elder Pharmaceuticals’ results are not comparable both YoY and QoQ as
it increased it stake in Biomeda and completed the acquisition of
NeutraHealth. The net sales increased by 59.6% YoY to | 302.7 crore.
The combined sales of Biomeda and NeutraHealth during the quarter
was | 80.9 crore. Excluding this, base business grew by 16.9% YoY to |
221.8 crore. The growth in sales was mainly driven by women’s
healthcare and neutraceuticals segments. EBITDA margins declined 116
bps YoY to 17.8% were on the back of consolidation of low margins
business. EBITDA grew by 49.3% to | 51 crore. Despite a robust 49%
growth at the EBITDA level, the net profit grew a mere 3% to | 17 crore
on the back of an increase in the depreciation and interest cost. The
company is planning to launch 13-15 products in FY12.
Ipca’s net profit grow 57% YoY
Ipca's Q4FY11 net sales increased by 30% YoY to | 478.5 crore mainly
driven by robust growth in the export formulation business, which went
up by 73.5% to | 227.4 crore. With the increase in proposition of
formulation sales in the total sales, EBITDA margins improved 210 bps to
20.5%. The net profit grew 57% to | 58.6 crore.
Jubilant plans to spend | 500 crore capex for FY12
Jubilant Life Sciences posted a 55% drop in March quarter consolidated
profit but expects to post robust revenue growth and operating profits in
FY12 on higher capacity utilisation and expansion into new geographies.
The firm posted a net profit of | 61.72 crore while net sales fell by a tenth
to | 890 crore. The firm has planned capex of | 500 crore for FY12 to
drive growth and its proposed expansion is likely to generate revenue of
more than | 1200 crore at full capacity utilisation.
Lupin’s net sales up 17.5% YoY, boosted by Japanese business
Lupin's Q4FY11 net sales increased by 17.5% YoY to | 1511.5 crore on
the back of strong growth from Japan, emerging markets and the US
branded business in particular. EBITDA margins declined 200 bps to 20%
due to higher R&D cost, higher API sales and incremental overheads at
the Indore SEZ. Lupin registered good growth in all major geographies
including the US, which was least expected. Lower other income and
higher interest outgo restricted the net profit growth to 3% YoY to |
227.20 crore.
Natco net profit declines 4% YoY
Natco Pharma’s net profit for the March quarter declined 4% to | 14.38
crore. Total income for the quarter stood at |115.30 crore as against
|127.38 crore for the corresponding quarter last year
Opto’s net sales grow 12% on a like to like basis
Opto Circuit’s net sales grew 63% YoY to | 544.5 crore for the March
quarter. On a like-to-like basis, sales grew by 12% to | 373 crore. During
the quarter its subsidiary Cardiac Science (CSC) posted sales of ~ | 171
crore and net profit of ~| 18.9 crore. EBITDA margins declined ~1130
bps YoY to 22% due to consolidation of CSC. EBITDA grew by 7.3% to |
119 crore. Despite marginal growth in EBITDA, the net profit grew by
69% YoY to | 111 crore on the back forex gains and lower taxation.
Orchid posts net profit of | 156 crore for FY11
Orchid Chemicals and Pharmaceuticals posted a net profit of | 156.19
crore during the year ended March 2011 as against | 339.25 crore in the
previous year. The figures are not comparable as the company
transferred its injectable formulation business to Hospira in March 2010.
Last year’s net profit was mainly due to extraordinary item of | 884.72
crore. Before this adjustment, Orchid was incurring a loss of | 545.46
crore in 2009-10.
Continuing businesses of Piramal Healthcare grow 38% YoY
Piramal Healthcare's (PHL) Q4FY11 results are not comparable YoY as it
sold its domestic pharma business and diagnostic business to Abbott
and SRL, respectively. On a like-to-like basis, the continued business
posted sales growth of 38% YoY driven by strong growth in CRAMS and
critical care segments. Net profit stood at | 201.8 crore as against | 0.2
crore in Q4FY11. PHL has decided to enter the financial services
business. The company is planning to set up an NBFC for lending to
infrastructure and other sectors. Beside this, it is also entering into fund
management in the real estate and infrastructure sector.
Ranbaxy’s profit declines on a higher base
Ranbaxy Laboratories’ quarterly profit fell 68%, mainly because limited
competition in drug sales boosted the figures compared to a year earlier.
However, the drop was lower than Street forecasts. Net sales for the
three-month period fell 13.6% from a year ago to | 2,143 crore.
Ranbaxy’s sales from overseas markets, which account for the bulk of
the revenues, were down 19% to | 1,698 crore. Its sales from the
domestic market rose 18.5% to | 448.91 crore. North America fell 8.8%
YoY to | 701.8 crore as the year-ago quarter was boosted by sales from a
limited competition drug.
Sun Pharma registers strong sales boosted by Taro
Sun Pharmaceuticals posted a strong performance in Q4FY11 on the
back of an improved performance from Taro Pharmaceutical. The results
are not comparable YoY due to consolidation of Taro Pharmaceuticals.
Net sales increased by 35.5% YoY to | 1463.3 crore. Excluding Taro’s
numbers, sales declined 9% YoY on a higher base. EBITDA margins
declined 843 bps YoY on account of a higher spend on corrective
measures at Caraco's Detroit facility and Sun's New Jersey facility. Net
profit grew by 12.2% to | 442.8 crore.
Torrent Pharma’s net profit declines 28% YoY
Torrent Pharma's Q4FY11 revenues grew 11% to | 526.4 crore as the
company provided charge back of | 28 crore in the US market. EBITDA
margins declined ~810 bps YoY to 12.3% due to charge back provision
and higher SGA expenses due to an increase in the field force. The
EBITDA declined by 33% YoY to | 64.5. Net profit witnessed de-growth
of 28% YoY to | 42.8 crore.
Unichem posts 3% growth in net sales for Q4FY11
Unichem Laboratories' Q4FY11 numbers were below our expectations.
Total revenues on a standalone basis grew just 3% YoY to | 178.1 crore
due to de-growth in the domestic formulation business and export API
business. EBITDA margins declined sharply by ~1060 bps to 13.3% due
to increase in overheads on account of new addition of 600 odd medical
representatives, commissioning of new manufacturing facilities at Baddi
and Sikkim, higher raw materials cost and higher marketing expenses.
Net profit declined by 56% YoY to | 18.6 crore.
M&A, demergers & JVs
JB Chemicals to sell OTC brands for US$260 million
JB Chemicals & Pharmaceuticals (JBCPL) has agreed to sell its over-thecounter Russian brands to Johnson & Johnson (J&J) for about US$260
million. The deal, expected to get closed by the middle of this year, is
being struck through J&J’s wholly-owned Cilag GmbH International. The
company’s board has also approved the sale of worldwide rights and
registrations of three over-the-counter (OTC) brands — Doktor Mom,
Rinza (the No. 1 and No. 2 cough and cold brands in Russia) and Fitovit.
The sale will also involve the transfer of employees, inventory and
receivables of the Russia/CIS OTC business. Doktor Mom has annual
sales of about | 200 crore in Russia and CIS countries (~35% of JBCPL’s
sales).
Piramal Life Sciences’ NCE unit to merge with Piramal Healthcare
The boards of Piramal Healthcare (PHL) and Piramal Life Sciences (PLSL)
considered and approved the scheme of arrangement between PLSL and
PHL. Under the proposed de-merger scheme, the new chemical entity
(NCE) division of PLSL would be de-merged and merged to PHL from
April with effect from April 1, 2011. Each shareholder of PLSL will be
entitled to one fully paid up equity share of | 2 of PHL for every four
equity shares of | 10 each held in PLSL. All assets and liabilities of the
NCE division will be transferred to PHL at book value. The entire process
is expected to get completed in six months. Total 24 molecules are in the
development pipeline.
IP issues
Glenmark settles patent litigation with Triax Pharma, Astellas Pharma
Glenmark Pharmaceuticals has entered into a settlement and license
agreement with Triax Pharmaceuticals, LLC, Astellas Pharma Europe BV
and Astellas Pharma International to resolve a US patent infringement
suit related to Glenmark’s filing of an ANDA for 0.1% hydrocortisone
butyrate cream. The drug is the generic version of Locoid Lipocream.
According to IMS Health data, for 2010, Locoid Lipocream achieved sales
of approximately US$38 million.
Glenmark resolves patent litigation with Nycomed
Glenmark Pharmaceuticals has entered into a settlement and license
agreement with Nycomed to resolve the patent infringement lawsuit
regarding Glenmark's ANDA for Fluticasone Propionate 0.05% Lotion.
The cream is a generic version of Cutivate. Under the terms of the
settlement agreement, the company will be able to market and distribute
its Fluticasone Propionate Lotion under a royalty-bearing license from
Nycomed US in March 2012, or earlier in certain circumstances.
Glenmark has filed the ANDA with Para IV and holds 180 days of
exclusivity for the cream. As per IMS Health sales data, Cutivate
(Fluticasone Propionate) 0.05% Lotion clocked sales of around $48
million in the US for the year ended 2010.
'
Medicines sues Dr Reddy’s over drug Bivalirudin
US based Medicines’ has filed a suit against Dr Reddy’s laboratories in
US court related patent infringement. Dr Reddy’s has filed an ANDA for
seeking approval for the generic version of Bivalirudin, which is used as
an anti-coagulant for patients with unstable angina undergoing
percutaneous tranluminal coronary angioplasty. The innovator markets
the drug under the brand name of Angiomax. The market size of
Angiomax would be around US$400 million.
Sun Pharma wins patent litigation against Eli Lilly for Gemzar
The US Supreme Court rejected an Eli Lilly & Co. appeal seeking to save
the drug maker's patent for anti-cancer drug Gemzar. The case involved a
challenge to the patent by Sun Pharmaceutical Industries. The
invalidated patent would have extended Lilly's marketing exclusivity for
Gemzar into 2013. Lilly has argued that the Gemzar patent, which dealt
with anti-cancer uses for the drug, should have been honoured because
the earlier patent dealt only with anti-viral uses. Sun Pharma has said
Lilly did not deserve a second patent to extend its Gemzar monopoly
because the anti-viral uses Lilly claimed in the first patent never proved
viable. Gemzar, whose chemical name is gemcitabine, generated US
sales of US$723 million.
Other development
Aurobindo repurchases all its outstanding FCCBs
Aurobindo Pharma has repurchased and cancelled all its outstanding
FCCBs. The company has paid an aggregate amount of US$203.86
million including premium for both aforesaid tranches. The company has
paid 50% through cash and 50% through FCNR (B) route.
Jubilant repays FCCBs worth US$202 million
Jubilant Life Sciences has repaid FCCBs worth US$202 million including
YTM of US$60 million. With this repayment, no more FCCBs are
outstanding on the books. The company has repaid all outstanding
FCCBs on time, as per schedule, in line with the terms and conditions of
the FCCB instruments.
No comments:
Post a Comment