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Cooling off…
After a decent rally attributable to a good show in May post good
Q4FY11 results, we observed some cooling off effect in June in the
Pharma Pill Universe. During the month, Dr Reddy’s became only the
sixth Indian company to receive a warning letter from the USFDA for its
Mexico facility. In a significant development, Lupin and Natco joined
hands to tap an FTF opportunity, Tykerb, an oncology drug of GSK.
Lupin also acquired worldwide rights of Goanna brand, a household OTC
product of Australia. On the R&D front, Jubilant joined hands with
Belgium based Janssen to focus on the area of neuroscience. Cadila
Healthcare made its foray into controlled release medications by
acquiring US based Nesher Pharma for US$60 million.
In June, there were as many as 19 ANDA approvals from the USFDA.
Among them, Aurobindo, Glenmark, Lupin, Sun and Torrent received
three each while Dr Reddy’s received two approvals.
Sector view
So far in FY12, the healthcare index has outperformed the broader
markets on account of strong growth in Q4FY11, muted Q4 numbers by
some of the Sensex players and shifting preference towards defensives
such as pharma and FMCG. The sector was one of the better performers
of the universe and was able to withstand crude shock and inflationary
pressure in Q4. 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 Pharma gets USFDA nod for generic Xanax tablets
Aurobindo Pharma has received final approval from the USFDA to
manufacture and market Alprazolam Extended-Release Tablets 0.5 mg, 1
mg, 2 mg, and 3 mg. Alprazolam Extended-Release Tablets 0.5 mg, 1
mg, 2 mg and 3 mg is the generic equivalent of the reference listed drug
Xanax XR Tablets 0.5 mg, 1 mg, 2 mg and 3 mg of Pharmacia and
Upjohn. Alprazolam Extended-Release Tablets are indicated for the
treatment of panic disorder with or without agoraphobia and fall under
the central nervous system (CNS) therapeutic segment. The product has
a market size of approximately US$26.5 million for the 12 months ending
September 2010 according to IMS.
Aurobindo receives marketing approval Ramipril capsules from USFDA
Aurobindo Pharma has received final approval from the USFDA to
manufacture and market Ramipril Capsules USP 1.25 mg, 2.5 mg, 5 mg
and 10 mg. Ramipril Capsules USP 1.25 mg, 2.5 mg, 5 mg and 10 mg is
the generic equivalent to the reference listed drug Altace Capsules 1.25
mg, 2.5 mg, 5 mg and 10 mg of King Pharmaceuticals Inc. Ramipril
Capsules are indicated for the treatment of hypertension and falls under
the cardiovascular (CVS) therapeutic segment. The product has a market
size of approximately US$95 million for the 12 months ending
September 2010 according to IMS.
Glenmark receives USFDA approval for Mupirocin ointment
Glenmark Generics has been granted final approval from the USFDA for
Mupirocin ointment USP, 2%. Mupirocin ointment is indicated for the
topical treatment of bacterial infections. Based on IMS Health sales data
for the 12 month period ending March 2011, Mupirocin ointment
garnered annual sales of US$55 million and achieved a 9% increase in
growth compared to the same period last year.
Jubilant to market generic Aricept in US market
Jubilant Life Sciences has received approval from the USFDA for
Donepezil Hydrochloride Tablets 5 mg and 10 mg, a generic equivalent
of Aricept. Donepezil Hydrochloride tablets are indicated for the
treatment of dementia of the Alzheimer’s type, in patients with mild,
moderate and severe Alzheimer’s disease. The total annual market sales
for Aricept 5 mg and 10 mg tablets were US$2.6 billion (IMS-MAT:
September 2010).
Opto to market PowerHeart G3 AED in Japan
Opto Circuit's subsidiary Cardiac Science Corporation has received
regulatory clearance from the Japan Ministry of Health, Labour and
Welfare to market its PowerHeart G3 Automated External Defibrillators
(AED) in Japan.
USFDA grants marketing approval for Strides’ Levofloxacin Injection
Strides Arcolab has received USFDA approval for Levofloxacin Injection,
25 mg/ml packaged in 500 mg/20 ml and 750mg/30 ml single-use vials.
Levofloxacin is an antibiotic used to treat mild to severe bacterial
infections or bacterial infections that have failed to respond to other
antibiotic classes. According to IMS September 2010 data, the total
market for Levoflaxacin in the US is approximately US$158 million.
Sun Pharma gets USFDA approval for generic Imitrex injection
Sun Pharmaceutical Industries has received USFDA approval to market a
generic version of Sumatriptan Succinate Injection, 6 mg (base)/0.5 ml.
Sumatriptan injection is indicated for the treatment of migraine attacks.
This generic drug is equivalent of Imitrex brand of GlaxoSmithKline.
Annual sale for Sumatriptan Succinate Injections in the US is
approximately US$190 million.
Strides to launch antibiotic injection in US market
Strides Arcolab has received USFDA approval for anti-bacterial injection
Polymyxin B. As per 2010 IMS data, the size of the drug in the US market
was ~US$8 million. Strides will launch the product in the US in Q3CY11.
Lupin receives USFDA approval for Levofloxacin tablets
Lupin’s US subsidiary, Lupin Pharmaceuticals, Inc. (LPI) has been granted
final approval by the USFDA to market a generic version of Ortho
McNeil’s Levaquin (Levofloxacin) tablets. Commercial shipment of the
product has commenced. Lupin’s Levofloxacin 250 mg, 500 mg and 750
mg tablets are the AB-rated generic equivalent of Levaquin, used to treat
or prevent infections caused by susceptible bacteria. Levaquin tablets
had annual sales of approximately US$1.6 billion for the 12 months
ended March 2011, based on IMS Health sales data
New Facility approval & commission
Opto Circuits commissions Malaysian manufacturing facility
Opto Circuits, which slated an investment of | 150 crore for new plants,
has now commissioned its facility in Malaysia to manufacture multi
parameter patient monitors. The plant, located in Johor Bahru, is a
special economic zone and the company would benefit with a 10-year
tax exemption. The company expects to scale up manufacturing of this
unit in the coming months by adding lines for manufacture of patient
monitors.
Strides receives EDQM approval for oral dosage oncology facility
Strides Arcolab’s subsidiary, Agila, has received European approval for
its oral dosage oncology facility in Bangalore. Strides expects to start
commercial launches from this facility by Q3CY11. The Injectable facility
in the Oncology complex has already received approvals from various
regulatory agencies.
Deals & Alliances
Lupin and Natco join hands to launch generic Tykerb in US market
Lupin and Natco Pharma announced an alliance to jointly commercialise
generic equivalent of Glaxo's Tykerb (lapatinib ditosylate) tablets used for
the treatment of breast cancer. Natco had filed an abbreviated new drug
application (ANDA) seeking USFDA's approval for marketing generic
equivalent of Tykerb 250 mg tablets. Natco and Lupin believe that they
are first-to-file an ANDA containing a Paragraph IV certification for
Lapatinib. Tykerb had sales of US$113.6 million as of March 2011 (IMS).
Jubilant, Janssen sign R&D tie up to supply pre-clinical candidates
Jubilant Life Sciences has entered into an agreement with Janssen
Pharmaceutica NV of Belgium to deliver pre-clinical candidates in the
area of neuroscience to the Belgium-based firm. The pact will span an
initial period of three years and will focus on multiple targets in the area
of neuroscience. As per the deal, Janssen will transfer ongoing efforts on
selected drug discovery targets to Jubilant. Jubilant shall then carry out
the research services and deliver pre-clinical candidates to Janssen for
possible further development and commercialisation. In addition to
research funding, Jubilant may also be eligible to receive payments at
different intervals and royalties should Janssen successfully develop and
commercialise the candidates.
Bio-XCell signs an agreement with Strides to set up manufacturing unit
Strides Arcolab has chosen Malaysia's biotechnology park to set up its
first manufacturing facility for biotech drugs. Its new Malaysian venture,
Agila Specialties (Malaysia) SDN BHD, has signed an MoU with
Malaysian State-promoted Bio-XCell to start a biopharma and injectables
plant in the biotech zone. Strides maintains that there would be no
specific investment as Bio- XCell would custom-build and lease out the
facility to Agila. As Bio-XCell will be set up in the Malaysia biotech park,
Strides will get financial incentives from the Malaysian government.
M&A, Demergers & JVs
Cadila to acquire US based Nesher Pharmaceuticals for US$60 million
Zydus Cadila will acquire US-based pharmaceutical company Nesher
Pharmaceuticals Inc through its subsidiary Zynesher Pharmaceuticals
USA LLC for US$60 million. Zynesher has entered into an agreement to
acquire the assets of Nesher. Nesher operates as the generic subsidiary
of KV Pharmaceutical based at St Louis, Missouri, in the US. Nesher has
considerable expertise in niche therapies, which have development or
production barriers, such as controlled release medications or drug
enforcement administration (DEA) controlled substances. Nesher has an
ANDA pipeline comprising eight existing filings and five products under
development. These products belong to high growth, niche segments,
which have a combined estimated market size of over US$2.1 billion.
Lupin acquires worldwide rights for Goanna brand
Lupin's Australian subsidiary, Generic Health Pty Ltd. has acquired the
worldwide rights to the Goanna brand and the complete range of
premium therapeutic oils, rubs and ointments marketed under the brand
for an undisclosed amount from Aspen Holdings. Founded in 1910, the
Goanna brand has been trusted by generations of Australians to provide
effective relief for muscular aches and pains and other conditions like
arthritis. The brand is being sold by about 83% pharmacies in Australia.
IP issues
Sanofi wins patent litigation case against Cipla’s annual healthcare
product
Cipla has lost a patent case in the US regarding an animal healthcare
product. The company has received an order dated June 21, 2011 from a
United States District Court, Middle District of Georgia against a petition
filed by Merial Limited (a Sanofi subsidiary) ruling that the sales of
PetArmor Plus (an animal healthcare product) allegedly infringed a patent
(Frontline Plus) held by Merial Limited and have suspended future sales
in the US. The District Court has stayed the above order for 60 days in
order to enable the company to appeal. Frontline Plus is the world’s best
selling flea and tick treatment for dogs and cats.
Warning letter
Dr Reddy’s gets warning letter from USFDA for its Mexico API facility
Dr Reddy’s Lab’s chemical manufacturing facility at Cuernavaca, Mexico,
has received a four-item warning letter from the USFDA. The facility, its
wholly-owned subsidiary, produces intermediates and active
pharmaceutical ingredients (APIs). API business constitutes 25% of the
overall sales.
Other development
GSK deposits | 71 crore into DEP account
As per the order of the Supreme Court, GlaxoSmithKline
Pharmaceuticals has deposited | 71.21 crore into Drug Price Equalization
Account (DPEA). The amount is given for overcharging betamethasone
bulk and its formulations made during 1981-1987. Apart from | 71.21
crore, the company will also pay interests as per the norms of regulation.
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