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S e l l i n g p r e s s u r e h i t s p h a rma s t o c k s , a t l a s t…
In August, we observed many pharma stocks coming under selling
pressure, in line with the broader markets. While large cap pharma
stocks (except Ranbaxy, Divi’s Labs and GSK) were able to withstand
selling pressure to some extent, some of the midcaps were hammered
on account of either weak numbers or high leverage. Aurobindo was
down by almost 27% on account of CBI raids in connection with the
alleged collision of the company promoters with Jagan Reddy.
During the month, Orchid got much needed respite when it was able to
restart the Alathur facility after a gap of nearly a month. August was
muted in terms of USFDA approvals as there were just seven approvals,
the fewest in FY12 so far. On the product launches front, Dr Reddy’s
launched the OTC version of anti-allergic Allegra D24 in the US markets.
Ranbaxy launched generic Nexium (anti-ulcerant) in the UK. On the IP
front, Natco (along with Mylan) received a setback in the US over the
generic launch of multiple sclerosis drug Copaxone, owned by Teva.
During the month, Jubilant signed a long-term supply agreement in the
proprietary products business with a leading international life sciences
company.
S e c t o r v i e w
In August, the healthcare index performed in line with the broader
markets as the dampened global sentiments hit pharma stocks as well.
Importantly, however, some leading large caps such as Lupin, Sun, Dr
Reddy’s and Cadila have shown good amount of resilience. Even some
of the midcaps such as Glenmark, Ipca and Elder have also withstood the
selling pressure. This suggests that the sell-off was not broad based and
the sector still remains a safe haven in volatile periods. This is mainly on
account of relative resilience to global shocks, in line Q1FY12 numbers
amid margin pressure and better visibility of future performance. The
margin pressure was mainly on account of pricing pressure in acute
therapies in both the US and India. The field force expansion in India also
added some pressure. Going ahead, we expect an improvement on this
front on account of chronic therapy focus, improved contribution from
the new field force and rural penetration. 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 aspects that will continue to weigh on the relative
outperformance vis-à-vis broader markets
Regulatory approvals
Glenmark gets USFDA approval for hypertensive drug
Glenmark received final approval from the USFDA for anti-hypertensive
Verapamil extended-release tablets, a generic version of Isoptin SR
tablets by Ranbaxy. For the 12 month period ending March 2011,
Verapamil extended-release tablets achieved sales of US$52 million,
according to IMS Health.
Sun Pharma receives USFDA nod for generic Proscar tablets
Sun Pharmaceuticals has received final approval for the abbreviated new
drug application (ANDA) from the USFDA for Finasteride 5 mg oral
tablets. It was originally developed and marketed by Merck under the
brand name Proscar. It is a urology product indicated for the treatment of
symptomatic benign prostate enlargement. Proscar has annual sales of
US$210 million for the year ended December 2010. Dr Reddy's
laboratories, Aurobindo Pharma and Cadila Healthcare have already
received the final approval.
IP issues
Dr Reddy’s resolves patent litigation of generic Lipitor with Pfizer
Dr Reddy’s Labs has entered into a settlement agreement with Pfizer that
will resolve litigation related to anti-cholesterol Lipitor Tablets, 10 mg, 20
mg, 40 mg, and 80 mg, known generically as Atorvastatin Calcium
tablets. The agreement is subject to review by the US Department of
Justice and the Federal Trade Commission. Ranbaxy holds 180 days
exclusivity for the drug.
Teva wins first round of patent litigation against Natco Pharma
In a setback to Natco Pharma, global generics giant Teva has claimed to
have won the first round of patent battle over the blockbuster multiple
sclerosis drug Copaxone (Glatiramer Aceatte) in the US. Teva Pharma
has said that the US District Court for the Southern District of New York
has issued a favourable set of claim construction rulings in the
company's patent infringement lawsuit against Natco and US generics
player Mylan along with Novartis' generic arm Sandoz and Momenta
Pharma. The drug clocked annual sales of US$2.2 billion in the US and
worldwide revenue from the product exceeded US$3 billion in 2010.
Deals & alliances
Biocon subsidiary R&D tie up with US based Spaulding Clinical
Biocon’s subsidiary, Clinigene International and Spaulding Clinical
Research, LLC, a US-based Clinical Pharmacology, Cardiac Core Lab and
Medical Device Manufacturer, recently announced a strategic partnership
agreement to establish a global footprint for clinical pharmacology
services providing an opportunity for both organisations to engage
pharmaceutical clients strategically and accelerate first-in-human to
proof-of-concept clinical development.
Jubilant bags an order to supply proprietary product
Jubilant Life Sciences has signed a long-term supply agreement in the
proprietary products business with a leading international life sciences
company. The total contract is valued at over US$80 million to be
supplied in three years from the quarter April-June 2012. This contract
has a minimum volume ‘take or pay’ commitment and has an
opportunity to go over US$100 million. The product under this contract
is based on an in-house developed technology, integrated with captivity
produced raw material resulting in competitive advantage both in terms
of cost of production and capital investment.
Lupin to market Sanofi’s CNS brands in the Philippines
Multicare Pharmaceuticals, the Philippine subsidiary of Lupin, has
entered into a marketing and distribution agreement with Sanofi Aventis
for the Philippine market. Under the agreement, Lupin will market
Sanofi’s central nervous system (CNS) global brands Solian (anti
psychotic) and Stilnox (Insomnia) in the Philippines. Annual sales of
these brands are valued at PHP 138 million (US$3.3 million) in the
Philippines market.
New Launches
Dr Reddy’s launches Allegra D24 OTC tablets in US market
Dr Reddy’s Labs launched its anti-allergic over-the-counter (OTC)
Fexofenadine HCl and Pseudoephedrine HCl extended release tablets
180/240 mg. The USFDA approved Dr Reddy’s ANDA for Fexofenadine
HCl and Pseudoephedrine HCl extended release tablets on June 22,
2011. Dr Reddy’s will market the product under the store brand labels in
the US market. The product is a bioequivalent version of Sanofi-Aventis’
Allegra D24 extended release tablets.
Ranbaxy launches painkiller in domestic market
The OTC business division of Ranbaxy Laboratories, Ranbaxy Global
Consumer Healthcare (RGCH) has launched Volini Duo, a two-in-one pain
killer, a unique bi-layered Acetaminophen tablet, specially formulated to
give dual pain relief. The product has been introduced pan-India. Volini
Duo tablet marks the entry of Ranbaxy in the OTC oral pain reliever
category. The OTC oral analgesics market in India is estimated to be |
700 crore and is growing annually at a rate of 10.5%. Globally,
Acetaminophen happens to be the highest selling molecule in the OTC
pain reliever category.
Ranbaxy launches esomeprazole tablets in UK market
Ranbaxy’s UK subsidiary has launched anti-ulcerant esomeprazole 20 mg
and 40 mg tablets, the first approved generic bio-equivalent version of
the product Nexium (owned by AstraZeneca) in the UK, with annual UK
sales of £60 million.
Financial Results
Elder Pharma like-to-like sales grow by 15% YoY
Elder Pharma's results are not comparable both YoY and QoQ as it
increased its stake in Biomeda and completed the acquisition of
NeutraHealth. Net sales grew 54% YoY to | 299.7 crore. The combined
sales of Biomeda and NeutraHealth during the quarter were | 76.1 crore.
Excluding this, the base business grew 15% YoY to | 223.6 crore.
EBITDA margins declined by 210 bps YoY to 17.3% as both Biomeda and
NeutraHealth are making a loss at the EBITDA level. Depreciation
increased by 79% to | 8.7 crore as it commissioned the Langa Road
facility.
GSK net profit grows by 9% YoY
GSK Pharmaceuticals posted 9% growth in net profit at |147.54 crore
during the second quarter ended June 30. Net sales grew by 13% to |
561.54 core during the same period. Sales of the core pharmaceuticals
and vaccines business grew by 14% while the operating profit margin
was maintained at 35% in line with the first quarter of 2011.
Jubilant net profit up by 53% YoY in Q1FY12
Jubilant Life Science’s consolidated net profit rose by 53% to | 77.12
crore for the first quarter ended June 30, 2011, over the same period of
the previous fiscal. Net sales of the company rose to | 944.3 crore for the
quarter ended June 30, 2011. The company’s EBITDA margins stood at
20.1%, compared to 17.6% in Q1FY11 and 15.4% in Q4FY11. Revenues
from the life science products, which stood at | 739 crore, contributed
78% to sales. It grew 19% YoY. Generics with sales of | 131 crore
contributed 14% to the revenue mix and recorded growth of 33% YoY.
Unichem continues to disappoint
Unichem Laboratories' standalone revenues grew by 1% YoY to | 188.7
crore due to de-growth in both the domestic formulation and API
businesses. EBITDA margins sharply declined by ~1450 bps to 14.3%
due to 1) decline in the high margin domestic formulation business, 2)
increase in overheads on account of new addition of ~600 medical
representatives, and 3) commissioning of new manufacturing facilities at
Baddi and Sikkim. Net profit declined by 53% YoY to | 18.6 crore.
Other developments
Orchid restarts production at its Alathur API facility
Orchid Chemicals and Pharmaceuticals' manufacturing facility in Alathur
(near Chennai) was restarted after nearly a month as the closure order of
the Tamil Nadu Pollution Control Board has been revoked. On July 11,
the pollution control board had directed the company to close its Alathur
facility over a non-compliance issue related to disposal of solid waste.
TNPCB had directed Orchid to mix powder ash to the solid waste that
was generated at the facility. The Alathur plant manufactures 800 tonnes
of Cephalosporin active pharmaceutical ingredients (API) annually. The
antibiotic fetches a third of the company's | 1600 crore revenues.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
S e l l i n g p r e s s u r e h i t s p h a rma s t o c k s , a t l a s t…
In August, we observed many pharma stocks coming under selling
pressure, in line with the broader markets. While large cap pharma
stocks (except Ranbaxy, Divi’s Labs and GSK) were able to withstand
selling pressure to some extent, some of the midcaps were hammered
on account of either weak numbers or high leverage. Aurobindo was
down by almost 27% on account of CBI raids in connection with the
alleged collision of the company promoters with Jagan Reddy.
During the month, Orchid got much needed respite when it was able to
restart the Alathur facility after a gap of nearly a month. August was
muted in terms of USFDA approvals as there were just seven approvals,
the fewest in FY12 so far. On the product launches front, Dr Reddy’s
launched the OTC version of anti-allergic Allegra D24 in the US markets.
Ranbaxy launched generic Nexium (anti-ulcerant) in the UK. On the IP
front, Natco (along with Mylan) received a setback in the US over the
generic launch of multiple sclerosis drug Copaxone, owned by Teva.
During the month, Jubilant signed a long-term supply agreement in the
proprietary products business with a leading international life sciences
company.
S e c t o r v i e w
In August, the healthcare index performed in line with the broader
markets as the dampened global sentiments hit pharma stocks as well.
Importantly, however, some leading large caps such as Lupin, Sun, Dr
Reddy’s and Cadila have shown good amount of resilience. Even some
of the midcaps such as Glenmark, Ipca and Elder have also withstood the
selling pressure. This suggests that the sell-off was not broad based and
the sector still remains a safe haven in volatile periods. This is mainly on
account of relative resilience to global shocks, in line Q1FY12 numbers
amid margin pressure and better visibility of future performance. The
margin pressure was mainly on account of pricing pressure in acute
therapies in both the US and India. The field force expansion in India also
added some pressure. Going ahead, we expect an improvement on this
front on account of chronic therapy focus, improved contribution from
the new field force and rural penetration. 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 aspects that will continue to weigh on the relative
outperformance vis-à-vis broader markets
Regulatory approvals
Glenmark gets USFDA approval for hypertensive drug
Glenmark received final approval from the USFDA for anti-hypertensive
Verapamil extended-release tablets, a generic version of Isoptin SR
tablets by Ranbaxy. For the 12 month period ending March 2011,
Verapamil extended-release tablets achieved sales of US$52 million,
according to IMS Health.
Sun Pharma receives USFDA nod for generic Proscar tablets
Sun Pharmaceuticals has received final approval for the abbreviated new
drug application (ANDA) from the USFDA for Finasteride 5 mg oral
tablets. It was originally developed and marketed by Merck under the
brand name Proscar. It is a urology product indicated for the treatment of
symptomatic benign prostate enlargement. Proscar has annual sales of
US$210 million for the year ended December 2010. Dr Reddy's
laboratories, Aurobindo Pharma and Cadila Healthcare have already
received the final approval.
IP issues
Dr Reddy’s resolves patent litigation of generic Lipitor with Pfizer
Dr Reddy’s Labs has entered into a settlement agreement with Pfizer that
will resolve litigation related to anti-cholesterol Lipitor Tablets, 10 mg, 20
mg, 40 mg, and 80 mg, known generically as Atorvastatin Calcium
tablets. The agreement is subject to review by the US Department of
Justice and the Federal Trade Commission. Ranbaxy holds 180 days
exclusivity for the drug.
Teva wins first round of patent litigation against Natco Pharma
In a setback to Natco Pharma, global generics giant Teva has claimed to
have won the first round of patent battle over the blockbuster multiple
sclerosis drug Copaxone (Glatiramer Aceatte) in the US. Teva Pharma
has said that the US District Court for the Southern District of New York
has issued a favourable set of claim construction rulings in the
company's patent infringement lawsuit against Natco and US generics
player Mylan along with Novartis' generic arm Sandoz and Momenta
Pharma. The drug clocked annual sales of US$2.2 billion in the US and
worldwide revenue from the product exceeded US$3 billion in 2010.
Deals & alliances
Biocon subsidiary R&D tie up with US based Spaulding Clinical
Biocon’s subsidiary, Clinigene International and Spaulding Clinical
Research, LLC, a US-based Clinical Pharmacology, Cardiac Core Lab and
Medical Device Manufacturer, recently announced a strategic partnership
agreement to establish a global footprint for clinical pharmacology
services providing an opportunity for both organisations to engage
pharmaceutical clients strategically and accelerate first-in-human to
proof-of-concept clinical development.
Jubilant bags an order to supply proprietary product
Jubilant Life Sciences has signed a long-term supply agreement in the
proprietary products business with a leading international life sciences
company. The total contract is valued at over US$80 million to be
supplied in three years from the quarter April-June 2012. This contract
has a minimum volume ‘take or pay’ commitment and has an
opportunity to go over US$100 million. The product under this contract
is based on an in-house developed technology, integrated with captivity
produced raw material resulting in competitive advantage both in terms
of cost of production and capital investment.
Lupin to market Sanofi’s CNS brands in the Philippines
Multicare Pharmaceuticals, the Philippine subsidiary of Lupin, has
entered into a marketing and distribution agreement with Sanofi Aventis
for the Philippine market. Under the agreement, Lupin will market
Sanofi’s central nervous system (CNS) global brands Solian (anti
psychotic) and Stilnox (Insomnia) in the Philippines. Annual sales of
these brands are valued at PHP 138 million (US$3.3 million) in the
Philippines market.
New Launches
Dr Reddy’s launches Allegra D24 OTC tablets in US market
Dr Reddy’s Labs launched its anti-allergic over-the-counter (OTC)
Fexofenadine HCl and Pseudoephedrine HCl extended release tablets
180/240 mg. The USFDA approved Dr Reddy’s ANDA for Fexofenadine
HCl and Pseudoephedrine HCl extended release tablets on June 22,
2011. Dr Reddy’s will market the product under the store brand labels in
the US market. The product is a bioequivalent version of Sanofi-Aventis’
Allegra D24 extended release tablets.
Ranbaxy launches painkiller in domestic market
The OTC business division of Ranbaxy Laboratories, Ranbaxy Global
Consumer Healthcare (RGCH) has launched Volini Duo, a two-in-one pain
killer, a unique bi-layered Acetaminophen tablet, specially formulated to
give dual pain relief. The product has been introduced pan-India. Volini
Duo tablet marks the entry of Ranbaxy in the OTC oral pain reliever
category. The OTC oral analgesics market in India is estimated to be |
700 crore and is growing annually at a rate of 10.5%. Globally,
Acetaminophen happens to be the highest selling molecule in the OTC
pain reliever category.
Ranbaxy launches esomeprazole tablets in UK market
Ranbaxy’s UK subsidiary has launched anti-ulcerant esomeprazole 20 mg
and 40 mg tablets, the first approved generic bio-equivalent version of
the product Nexium (owned by AstraZeneca) in the UK, with annual UK
sales of £60 million.
Financial Results
Elder Pharma like-to-like sales grow by 15% YoY
Elder Pharma's results are not comparable both YoY and QoQ as it
increased its stake in Biomeda and completed the acquisition of
NeutraHealth. Net sales grew 54% YoY to | 299.7 crore. The combined
sales of Biomeda and NeutraHealth during the quarter were | 76.1 crore.
Excluding this, the base business grew 15% YoY to | 223.6 crore.
EBITDA margins declined by 210 bps YoY to 17.3% as both Biomeda and
NeutraHealth are making a loss at the EBITDA level. Depreciation
increased by 79% to | 8.7 crore as it commissioned the Langa Road
facility.
GSK net profit grows by 9% YoY
GSK Pharmaceuticals posted 9% growth in net profit at |147.54 crore
during the second quarter ended June 30. Net sales grew by 13% to |
561.54 core during the same period. Sales of the core pharmaceuticals
and vaccines business grew by 14% while the operating profit margin
was maintained at 35% in line with the first quarter of 2011.
Jubilant net profit up by 53% YoY in Q1FY12
Jubilant Life Science’s consolidated net profit rose by 53% to | 77.12
crore for the first quarter ended June 30, 2011, over the same period of
the previous fiscal. Net sales of the company rose to | 944.3 crore for the
quarter ended June 30, 2011. The company’s EBITDA margins stood at
20.1%, compared to 17.6% in Q1FY11 and 15.4% in Q4FY11. Revenues
from the life science products, which stood at | 739 crore, contributed
78% to sales. It grew 19% YoY. Generics with sales of | 131 crore
contributed 14% to the revenue mix and recorded growth of 33% YoY.
Unichem continues to disappoint
Unichem Laboratories' standalone revenues grew by 1% YoY to | 188.7
crore due to de-growth in both the domestic formulation and API
businesses. EBITDA margins sharply declined by ~1450 bps to 14.3%
due to 1) decline in the high margin domestic formulation business, 2)
increase in overheads on account of new addition of ~600 medical
representatives, and 3) commissioning of new manufacturing facilities at
Baddi and Sikkim. Net profit declined by 53% YoY to | 18.6 crore.
Other developments
Orchid restarts production at its Alathur API facility
Orchid Chemicals and Pharmaceuticals' manufacturing facility in Alathur
(near Chennai) was restarted after nearly a month as the closure order of
the Tamil Nadu Pollution Control Board has been revoked. On July 11,
the pollution control board had directed the company to close its Alathur
facility over a non-compliance issue related to disposal of solid waste.
TNPCB had directed Orchid to mix powder ash to the solid waste that
was generated at the facility. The Alathur plant manufactures 800 tonnes
of Cephalosporin active pharmaceutical ingredients (API) annually. The
antibiotic fetches a third of the company's | 1600 crore revenues.
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