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DRL gets USFDA approval for Arixtra
Dr. Reddy’s Laboratories (DRL) received the final ANDA approval for Fondaparinux
Sodium Injection, a bioequivalent generic version of Arixtra, in the US market on July 11,
2011, by the USFDA. The approval covers 2.5mg/0.5ml, 5.0mg/0.4ml, 7.5mg/0.6ml and
10 mg/0.8 ml doses of the drug in prefilled colour-coded, single-dose syringes with an
automatic needle safety device.
DRL will manufacture fondaparinux under a license using the patented process developed
by Alchemia. The US patents on Arixtra expired in 2002, the year before the drug was
launched in the US. Alchemia’s process for the synthesis of fondaparinux is covered by a
patent estate with two issued patents and two pending applications in the US.
Arixtra brand had US sales of approximately US$340mn (yoy growth of 16%) for the 12
months ending May 2011. The product, with limited competition, is expected to contribute
US$50mn and US$28mn annually in sales and profits, respectively.
At the CMP, the stock trades at 17.6x FY2012E and 16.1x FY2013E earnings, respectively.
We maintain our Buy recommendation on the stock with a target price of `1,920.
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