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Lupin (LPC)
Pharmaceuticals
Lupin closer to launching generic Tricor. Lupin’s final US FDA approval for generic
Tricor (US$1.3 bn) and its settlement with the innovator clears the way for its launch of
generic Tricor on a mutually-agreed date (undisclosed). However, the competitive
scenario has changed with (1) Teva’s (first-to-file holder) surprise declaration that it does
not expect Tricor approval in 2012 and (2) Impax battling an FDA warning letter. This
may well become a 2-3 player market rather than a 5-6 player market in 2012. We
factor in a July 2012 launch, sales of US$40 mn for Lupin from Tricor in FY2013 and
potential for upside. Retain ADD, with a target price of Rs545.
Generic Tricor expected to see the light of the day in 2012
After years of Abbott having thwarted the generic entry of one of its major products through
“product hopping” and patent infringement lawsuits, Tricor might finally go generic in the US in
2012. Lupin is the front-runner, having received US FDA final approval on December 30, 2011.
Since 2002, Abbott has converted the Tricor (fenofibrate) market twice, from (1) fenofibrate
capsules to 54/160 mg fenofibrate tablets and (2) from 54/160 mg fenofibrate tablets to 48/145
mg tablets. In March 2002, Teva received FDA approval to market generic fenofibrate capsules
following a summary judgment of non-infringement regarding Teva's ANDA. However, the market
had already been converted from capsules to tablets. In May 2005, when Teva received final
approval for 54/160 mg fenofibrate tablets, Abbott was no longer marketing these dosages,
having successfully converted the market to 48/154 mg tablets during the pendency of the patent
litigation process against Teva and its second 30-month stay. In December 2009, Abbott and Teva
settled their lawsuit, under which Teva would enter the market in July 2012 bound by certain
conditions. However, as per its recent investor call in December 2011, Teva surprisingly declared
that it did not expect final approval for generic Tricor in 2012.
2-3 player market more likely than the 5-6 anticipated earlier
With (1) Teva’s (first-to-file holder) recent surprise declaration of not expecting generic Tricor
approval in 2012 and (2) Impax battling an FDA warning letter issued in June 2011 (resolution
expected in 1H2012), we believe the competitive scenario has changed. A 2-3 player market is
likely rather than the 5-6 player market earlier anticipated. The market is likely to include Lupin,
Ranbaxy and Biovail, in 2012. Ranbaxy settled its patent lawsuit in February 2011, but it has not
yet received final approval. As per our call with Lupin, it will launch on a mutually-agreed date
(undisclosed). However, in its 1QFY12 results call, Lupin reiterated (1) Teva may have forfeited its
exclusivity and (2) the first generic launch would take place in July 2012. We therefore expect
Lupin to launch in July 2012 and factor in sales of US$40 mn in FY2013 from Tricor, with potential
for upside, depending on competition.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Lupin (LPC)
Pharmaceuticals
Lupin closer to launching generic Tricor. Lupin’s final US FDA approval for generic
Tricor (US$1.3 bn) and its settlement with the innovator clears the way for its launch of
generic Tricor on a mutually-agreed date (undisclosed). However, the competitive
scenario has changed with (1) Teva’s (first-to-file holder) surprise declaration that it does
not expect Tricor approval in 2012 and (2) Impax battling an FDA warning letter. This
may well become a 2-3 player market rather than a 5-6 player market in 2012. We
factor in a July 2012 launch, sales of US$40 mn for Lupin from Tricor in FY2013 and
potential for upside. Retain ADD, with a target price of Rs545.
Generic Tricor expected to see the light of the day in 2012
After years of Abbott having thwarted the generic entry of one of its major products through
“product hopping” and patent infringement lawsuits, Tricor might finally go generic in the US in
2012. Lupin is the front-runner, having received US FDA final approval on December 30, 2011.
Since 2002, Abbott has converted the Tricor (fenofibrate) market twice, from (1) fenofibrate
capsules to 54/160 mg fenofibrate tablets and (2) from 54/160 mg fenofibrate tablets to 48/145
mg tablets. In March 2002, Teva received FDA approval to market generic fenofibrate capsules
following a summary judgment of non-infringement regarding Teva's ANDA. However, the market
had already been converted from capsules to tablets. In May 2005, when Teva received final
approval for 54/160 mg fenofibrate tablets, Abbott was no longer marketing these dosages,
having successfully converted the market to 48/154 mg tablets during the pendency of the patent
litigation process against Teva and its second 30-month stay. In December 2009, Abbott and Teva
settled their lawsuit, under which Teva would enter the market in July 2012 bound by certain
conditions. However, as per its recent investor call in December 2011, Teva surprisingly declared
that it did not expect final approval for generic Tricor in 2012.
2-3 player market more likely than the 5-6 anticipated earlier
With (1) Teva’s (first-to-file holder) recent surprise declaration of not expecting generic Tricor
approval in 2012 and (2) Impax battling an FDA warning letter issued in June 2011 (resolution
expected in 1H2012), we believe the competitive scenario has changed. A 2-3 player market is
likely rather than the 5-6 player market earlier anticipated. The market is likely to include Lupin,
Ranbaxy and Biovail, in 2012. Ranbaxy settled its patent lawsuit in February 2011, but it has not
yet received final approval. As per our call with Lupin, it will launch on a mutually-agreed date
(undisclosed). However, in its 1QFY12 results call, Lupin reiterated (1) Teva may have forfeited its
exclusivity and (2) the first generic launch would take place in July 2012. We therefore expect
Lupin to launch in July 2012 and factor in sales of US$40 mn in FY2013 from Tricor, with potential
for upside, depending on competition.
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