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2QFY12 prescription trends
Recent IMS numbers show pick up in volumes for Cadila and Dr Reddy’s
while Sun Pharma and Lupin have flattish volumes and Ranbaxy’s have
declined QoQ. Dr Reddy’s will show strong US growth due to new
launches (Arixtra and Allegra D24 OTC) and gradual market share gain in
some key products like Aricept, Prevacid, Prograf and Prilosec OTC. With
20-40% of total revenues coming from the US generics market, growth in
this market is of significance for most leading pharma companies. We
prefer Dr Reddy’s and Lupin for near term triggers from the US.
Limited new products during the quarter except Dr Reddy’s
q Most Indian pharma companies have seen limited new product introductions in the
US market during 2QFY12 except Dr Reddy’s.
q Dr Reddy’s has introduced generic versions of Arixtra, Allegra D24 OTC and Exelon.
It has also gradually inched up market share in OTC segment (Allegra and Prilosec).
q Apart from Dr Reddy’s, Cadila has gained market share in a number of products
and is expected to deliver strong growth in the US.
q Sun Pharma and Lupin have not seen many launches during the quarter and their
volume growth seems to be muted.
q In case of Ranbaxy, volumes have been flattish QoQ and declining YoY due to a
high base.
q Torrent pharma has been gaining market share in a couple of products like Protonix
and Aricept generic and should report strong US growth though the business is
small proportion of total revenues.
Long term growth potential intact
q With a strong wave of patent expirations in the US going up to 2015, we see
substantial earnings accretion for most of the Indian pharma companies.
q Considering that most of the Indian companies currently have a small absolute size
in the US market, scope of growth does not reduce dramatically with reduction in
patent expiration wave.
Dr Reddy’s and Lupin preferred for near term triggers
q We prefer Dr Reddy’s based on near term triggers beginning with authorized
generic launch from penicillins portfolio (acquired from GSK), Zyprexa in Oct 2011
and Geodon in 4QFY12.
q In case of Lupin, further approvals in oral contraceptives segment and Geodon in
4QFY12 serve as positive catalysts.
q In case of Ranbaxy, high base would result in flat to declining operating profit on a
YoY basis in this. Lipitor launch in Nov 2011 could provide a positive trigger.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
2QFY12 prescription trends
Recent IMS numbers show pick up in volumes for Cadila and Dr Reddy’s
while Sun Pharma and Lupin have flattish volumes and Ranbaxy’s have
declined QoQ. Dr Reddy’s will show strong US growth due to new
launches (Arixtra and Allegra D24 OTC) and gradual market share gain in
some key products like Aricept, Prevacid, Prograf and Prilosec OTC. With
20-40% of total revenues coming from the US generics market, growth in
this market is of significance for most leading pharma companies. We
prefer Dr Reddy’s and Lupin for near term triggers from the US.
Limited new products during the quarter except Dr Reddy’s
q Most Indian pharma companies have seen limited new product introductions in the
US market during 2QFY12 except Dr Reddy’s.
q Dr Reddy’s has introduced generic versions of Arixtra, Allegra D24 OTC and Exelon.
It has also gradually inched up market share in OTC segment (Allegra and Prilosec).
q Apart from Dr Reddy’s, Cadila has gained market share in a number of products
and is expected to deliver strong growth in the US.
q Sun Pharma and Lupin have not seen many launches during the quarter and their
volume growth seems to be muted.
q In case of Ranbaxy, volumes have been flattish QoQ and declining YoY due to a
high base.
q Torrent pharma has been gaining market share in a couple of products like Protonix
and Aricept generic and should report strong US growth though the business is
small proportion of total revenues.
Long term growth potential intact
q With a strong wave of patent expirations in the US going up to 2015, we see
substantial earnings accretion for most of the Indian pharma companies.
q Considering that most of the Indian companies currently have a small absolute size
in the US market, scope of growth does not reduce dramatically with reduction in
patent expiration wave.
Dr Reddy’s and Lupin preferred for near term triggers
q We prefer Dr Reddy’s based on near term triggers beginning with authorized
generic launch from penicillins portfolio (acquired from GSK), Zyprexa in Oct 2011
and Geodon in 4QFY12.
q In case of Lupin, further approvals in oral contraceptives segment and Geodon in
4QFY12 serve as positive catalysts.
q In case of Ranbaxy, high base would result in flat to declining operating profit on a
YoY basis in this. Lipitor launch in Nov 2011 could provide a positive trigger.
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