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Lipitor settlement
Dr. Reddy’s settlement on Lipitor was widely expected considering an atrisk
launch would be difficult in such a large product. While terms of
settlement are not disclosed, it is quite likely that Dr. Reddy's enters after
Ranbaxy's six months in May2012. We expect Dr. Reddy’s to earn
US$60m+ from this prospect in FY13. Earnings contribution would reduce
thereafter as more players enter this product.
Lipitor settlement
Dr. Reddy's has settled its patent litigation on Lipitor with Pfizer.
While terms of settlement are not disclosed, it is quite likely that Dr. Reddy's
enters after Ranbaxy's six months in May2012.
Ranbaxy is the first to file on this product though its launch has been under
uncertainty due to the on-going US FDA issues.
We already assume that Dr. Reddy’s will launch in May 2012 along with Teva
and Mylan where after other players will enter as respective 30-months stay
expire.
We expect Dr. Reddy’s to make US$60m+ in net profits from this product in
FY13. While earnings accretion will continue in the following year, with
increasing competition pricing will trend downwards and market share would
come under pressure.
Potential delays in launch reduce profit opportunity in FY13. This could
happen in case FDA allows the first filers exclusive launch to be postponed till
resolution of the manufacturing issues.
Multiple triggers
We see multiple triggers for the stock from the US market perspective. We
see strong earnings accretion for the company considering recent launches
like Arixtra and Allegra D24 and market share gains in existing products.
Dr. Reddy's trades at 14x FY13 reported profits. We maintain our BUY call on
the stock considering multiple triggers and earning opportunities. Near term
launches like Zyprexa and Augmentin authorised generic would result in a
strong 2HFY12.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� �
Lipitor settlement
Dr. Reddy’s settlement on Lipitor was widely expected considering an atrisk
launch would be difficult in such a large product. While terms of
settlement are not disclosed, it is quite likely that Dr. Reddy's enters after
Ranbaxy's six months in May2012. We expect Dr. Reddy’s to earn
US$60m+ from this prospect in FY13. Earnings contribution would reduce
thereafter as more players enter this product.
Lipitor settlement
Dr. Reddy's has settled its patent litigation on Lipitor with Pfizer.
While terms of settlement are not disclosed, it is quite likely that Dr. Reddy's
enters after Ranbaxy's six months in May2012.
Ranbaxy is the first to file on this product though its launch has been under
uncertainty due to the on-going US FDA issues.
We already assume that Dr. Reddy’s will launch in May 2012 along with Teva
and Mylan where after other players will enter as respective 30-months stay
expire.
We expect Dr. Reddy’s to make US$60m+ in net profits from this product in
FY13. While earnings accretion will continue in the following year, with
increasing competition pricing will trend downwards and market share would
come under pressure.
Potential delays in launch reduce profit opportunity in FY13. This could
happen in case FDA allows the first filers exclusive launch to be postponed till
resolution of the manufacturing issues.
Multiple triggers
We see multiple triggers for the stock from the US market perspective. We
see strong earnings accretion for the company considering recent launches
like Arixtra and Allegra D24 and market share gains in existing products.
Dr. Reddy's trades at 14x FY13 reported profits. We maintain our BUY call on
the stock considering multiple triggers and earning opportunities. Near term
launches like Zyprexa and Augmentin authorised generic would result in a
strong 2HFY12.
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