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http://content.icicidirect.com/mailimages/ICICIdirect_HealthCheck_March2012.pdf
P f i z e r b l o w t o B i o c o n , l i ce n s e b o o s t t o N a t c o …
In a major disappointment for Biocon, Pfizer has decided to conclude its
partnership with the company to market four Insulin products globally.
Although Biocon is expected to retain a major part of ~US$200 million,
the news has delivered a substantial blow to the future prospects as the
company has to scout for new alliances.
In another development, Natco Pharma (and for that matter other generic
players) received a shot in the arm when the Indian patent office issued a
license to the company to market a generic version of Bayer’s patented
cancer drug Nexavar by invoking provisions of compulsory licensing for
the first time since 1970 when the patent regime was first introduced.
The Union Budget 2012-13 extended the R&D benefits for five more years
giving a major boost to all major R&D spenders. However, it proved to be
a dampener for Sun and Cadila as the budget proposed to bring limited
liability partnership (LLP) entities, which were hitherto exempted from
any tax provisions, under the purview of MAT. This provision will
increase the tax liabilities for Sun and Cadila substantially.
On the new launches, Dr Reddy’s and Lupin launched generic versions of
Pfizer’s Geodon (anti-schizophrenic) in the US. Ranbaxy launched generic
Lipitor in Italy, Sweden and the Netherlands.
Finally, the domestic formulations market continued the growth
momentum by growing at 18.5% in February driven mainly by chronic
therapies such as CVS and anti-diabetics as per the latest AIOCD data.
With an extended winter, acute therapies also performed well. Sun,
Glenmark, Ipca and Pfizer continued their strong run while Cadila, Lupin,
Indoco and Cipla also joined the bandwagon.
S e c t o r v i e w
After two months of lagging, the BSE Healthcare index (BSEH) managed
to outperform the Sensex (March 1-26). In March, two major events - the
Union Budget and the verdict in the politically sensitive UP assembly
weighed on the broader markets. In general, the Budget did not please
the markets and the UP verdict led to resurfacing of fears of stalled
reforms, going ahead. This may be the reason behind investors seeking
safety in defensives such as healthcare despite disappointment on the
Biocon-Pfizer front. Robust secondary sales data from domestic
formulations sales also added to the buoyancy. Going ahead, we expect
the healthcare sector to remain under some sort of positive consolidation
although we maintain that the premium valuation gap will shrink, going
ahead, on account of rich valuations of healthcare companies. The sector
is anyway expected to outperform the broader markets on account of 1)
good traction from the US supported by product approvals, 2) growing
presence in Pharmerging markets and 3) a strong foothold in India.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
http://content.icicidirect.com/mailimages/ICICIdirect_HealthCheck_March2012.pdf
P f i z e r b l o w t o B i o c o n , l i ce n s e b o o s t t o N a t c o …
In a major disappointment for Biocon, Pfizer has decided to conclude its
partnership with the company to market four Insulin products globally.
Although Biocon is expected to retain a major part of ~US$200 million,
the news has delivered a substantial blow to the future prospects as the
company has to scout for new alliances.
In another development, Natco Pharma (and for that matter other generic
players) received a shot in the arm when the Indian patent office issued a
license to the company to market a generic version of Bayer’s patented
cancer drug Nexavar by invoking provisions of compulsory licensing for
the first time since 1970 when the patent regime was first introduced.
The Union Budget 2012-13 extended the R&D benefits for five more years
giving a major boost to all major R&D spenders. However, it proved to be
a dampener for Sun and Cadila as the budget proposed to bring limited
liability partnership (LLP) entities, which were hitherto exempted from
any tax provisions, under the purview of MAT. This provision will
increase the tax liabilities for Sun and Cadila substantially.
On the new launches, Dr Reddy’s and Lupin launched generic versions of
Pfizer’s Geodon (anti-schizophrenic) in the US. Ranbaxy launched generic
Lipitor in Italy, Sweden and the Netherlands.
Finally, the domestic formulations market continued the growth
momentum by growing at 18.5% in February driven mainly by chronic
therapies such as CVS and anti-diabetics as per the latest AIOCD data.
With an extended winter, acute therapies also performed well. Sun,
Glenmark, Ipca and Pfizer continued their strong run while Cadila, Lupin,
Indoco and Cipla also joined the bandwagon.
S e c t o r v i e w
After two months of lagging, the BSE Healthcare index (BSEH) managed
to outperform the Sensex (March 1-26). In March, two major events - the
Union Budget and the verdict in the politically sensitive UP assembly
weighed on the broader markets. In general, the Budget did not please
the markets and the UP verdict led to resurfacing of fears of stalled
reforms, going ahead. This may be the reason behind investors seeking
safety in defensives such as healthcare despite disappointment on the
Biocon-Pfizer front. Robust secondary sales data from domestic
formulations sales also added to the buoyancy. Going ahead, we expect
the healthcare sector to remain under some sort of positive consolidation
although we maintain that the premium valuation gap will shrink, going
ahead, on account of rich valuations of healthcare companies. The sector
is anyway expected to outperform the broader markets on account of 1)
good traction from the US supported by product approvals, 2) growing
presence in Pharmerging markets and 3) a strong foothold in India.
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