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Lupin with its approval of norethindrone tablets (we expect revenues of US$ 2.6m in
2HFY12) would now start recording revenues from its much awaited oral contraceptives
(OCs) segment. Despite 2-3 more launches (Femcon, etc) expected in 2HFY12, we expect
to see ramp-up in sales only by 2HFY13/ 1HFY14.
Lupin gets approval of its 1st OC product
Lupin announced today that it has been granted ANDA approval by the USFDA to market
a generic version of Watson’s NOR-QD© tablets (norethindrone tablets, USP 0.35 mg).
Lupin is likely to commence shipping its norethindrone tablets, USP 0.35 mg shortly. The
generic is a progestin-only oral contraceptive (OCs) indicated for the prevention of
pregnancy.
We see limited upside from the product
Based on IMS Health sales data, the combined annual sales for NOR-QD© and its
generic equivalents were approximately $52 million for the twelve months ended June
2011. We highlight that Glenmark had received approval for this generic on 22nd July
2010. Glenmark since approval has not been able to garner significant market share
since these are sticky products.
With Lupin receiving approval for the product (assuming price erosion of 30% in the
presence of 2 generic players) we expect the company to garner some market share
(assuming ~15% for FY12F) on the back of its relatively stronger field force in US.
We expect Lupin to realize revenues of US$2.6m in 2HFY12 and earnings of US$1.7m
(assuming 80% margin - since Lupin is vertically integrated and 20% tax rate) from this
product. We expect to see increased generic competition by FY13F.
We expect revenues of US$8m and US$30m from OCs in FY12F and FY13F
We in our recent Lupin note (Lupin - Its time for a breather, where we downgraded the stock
to Hold) had highlighted that Lupin’s oral contraceptives basket would start yielding results
from this fiscal year with the launch of the authorised generic of Femcon Fe in late September
(expected around 28th September) coupled with 2-3 other products.
We had further highlighted in the note that the management expects approval of about 15
products by 2HFY13 and has cautioned that a meaningful contribution from these products
would take another year. We thus expect a meaningful ramp-up only by 2HFY13/ 1HFY14.
We have pencilled in revenues of US$8m and US$30m from the oral contraceptives basket in
FY12F and FY13F.
Limited upside from current levels; Hold with TP of Rs 460
We value the core business at a 5% discount to peers, ie, a PE of 18x, which yields a value of
Rs453/share. To this, we add Rs8 for one-off Para IV products (post a 20% discount),
resulting in SOTP-based TP of Rs460. Maintain Hold.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Lupin with its approval of norethindrone tablets (we expect revenues of US$ 2.6m in
2HFY12) would now start recording revenues from its much awaited oral contraceptives
(OCs) segment. Despite 2-3 more launches (Femcon, etc) expected in 2HFY12, we expect
to see ramp-up in sales only by 2HFY13/ 1HFY14.
Lupin gets approval of its 1st OC product
Lupin announced today that it has been granted ANDA approval by the USFDA to market
a generic version of Watson’s NOR-QD© tablets (norethindrone tablets, USP 0.35 mg).
Lupin is likely to commence shipping its norethindrone tablets, USP 0.35 mg shortly. The
generic is a progestin-only oral contraceptive (OCs) indicated for the prevention of
pregnancy.
We see limited upside from the product
Based on IMS Health sales data, the combined annual sales for NOR-QD© and its
generic equivalents were approximately $52 million for the twelve months ended June
2011. We highlight that Glenmark had received approval for this generic on 22nd July
2010. Glenmark since approval has not been able to garner significant market share
since these are sticky products.
With Lupin receiving approval for the product (assuming price erosion of 30% in the
presence of 2 generic players) we expect the company to garner some market share
(assuming ~15% for FY12F) on the back of its relatively stronger field force in US.
We expect Lupin to realize revenues of US$2.6m in 2HFY12 and earnings of US$1.7m
(assuming 80% margin - since Lupin is vertically integrated and 20% tax rate) from this
product. We expect to see increased generic competition by FY13F.
We expect revenues of US$8m and US$30m from OCs in FY12F and FY13F
We in our recent Lupin note (Lupin - Its time for a breather, where we downgraded the stock
to Hold) had highlighted that Lupin’s oral contraceptives basket would start yielding results
from this fiscal year with the launch of the authorised generic of Femcon Fe in late September
(expected around 28th September) coupled with 2-3 other products.
We had further highlighted in the note that the management expects approval of about 15
products by 2HFY13 and has cautioned that a meaningful contribution from these products
would take another year. We thus expect a meaningful ramp-up only by 2HFY13/ 1HFY14.
We have pencilled in revenues of US$8m and US$30m from the oral contraceptives basket in
FY12F and FY13F.
Limited upside from current levels; Hold with TP of Rs 460
We value the core business at a 5% discount to peers, ie, a PE of 18x, which yields a value of
Rs453/share. To this, we add Rs8 for one-off Para IV products (post a 20% discount),
resulting in SOTP-based TP of Rs460. Maintain Hold.
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