Please Share:: 
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Dr Reddy's Lab — US product catalysts on
track; Buy
Country Overview
US pipeline triggers; Reiterate Buy
DRL made 2 key announcements 1) Launch of Allegra D24 OTC version, and 2)
Settlement paving way for launch of generic Lipitor. We expect these products to
be important contributors to the company's growth in US (26% of FY11 sales,
50% CAGR over next 2 years). Being limited competition products, we believe
there could be upside risk to both, market share and price erosion assumptions.
News flows also provide much awaited triggers for positive stock performance.
Settlement validates generic Lipitor launch
DRL has settled with innovator Pfizer on generic Lipitor, which implies likely
launch by May’12, post exclusivity. Our forecasts assume DRL market share at 8-
12 over next 2 years and peak price erosion of 95% with likely entry of 3 more
players by 2014. As such, we expect the product to contribute around US$40mn
annual sales.
Allegra D24 OTC version launched in US
Following OTC version approval in June’11, DRL extended Allegra franchise
through Allegra D24 launch, in line with our expectations. The company already
holds 20% market share in the base version (fexofenadine). DRL is sole
competitor to innovator Sanofi (~US$180mn Rx sales) in Allegra D24, implying
extended exclusivity and high profitability. We have factored US$35-40mn annual
sales from this product (30% mkt share) for next 2 yrs.
Dr Reddy's Lab (DRYBF)
Our PO of Rs1860 (US$41.8 for ADR) is based on the sum of (a) Rs1793/sh
(US$40.3/ADR) for base business, valued at 20x FY13E EPS, in line with large
cap Indian Pharma peers (Sun, Cipla, Lupin), and (b) Rs67 (US$1.5/ADR) for
limited period exclusivity opportunity (generic Arixtra, Allegra OTC, Zyprexa,
Geodon), valued on an NPV basis.
Risks are: (a) delays in approval of niche filings in US Generics business, (b)
slower-than-expected revival of domestic formulations business (c) higher-thanexpected
pain in Betapharm (Germany) operations, and (d) adverse impact of
ruble exchange fluctuation.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Dr Reddy's Lab — US product catalysts on
track; Buy
Country Overview
US pipeline triggers; Reiterate Buy
DRL made 2 key announcements 1) Launch of Allegra D24 OTC version, and 2)
Settlement paving way for launch of generic Lipitor. We expect these products to
be important contributors to the company's growth in US (26% of FY11 sales,
50% CAGR over next 2 years). Being limited competition products, we believe
there could be upside risk to both, market share and price erosion assumptions.
News flows also provide much awaited triggers for positive stock performance.
Settlement validates generic Lipitor launch
DRL has settled with innovator Pfizer on generic Lipitor, which implies likely
launch by May’12, post exclusivity. Our forecasts assume DRL market share at 8-
12 over next 2 years and peak price erosion of 95% with likely entry of 3 more
players by 2014. As such, we expect the product to contribute around US$40mn
annual sales.
Allegra D24 OTC version launched in US
Following OTC version approval in June’11, DRL extended Allegra franchise
through Allegra D24 launch, in line with our expectations. The company already
holds 20% market share in the base version (fexofenadine). DRL is sole
competitor to innovator Sanofi (~US$180mn Rx sales) in Allegra D24, implying
extended exclusivity and high profitability. We have factored US$35-40mn annual
sales from this product (30% mkt share) for next 2 yrs.
Dr Reddy's Lab (DRYBF)
Our PO of Rs1860 (US$41.8 for ADR) is based on the sum of (a) Rs1793/sh
(US$40.3/ADR) for base business, valued at 20x FY13E EPS, in line with large
cap Indian Pharma peers (Sun, Cipla, Lupin), and (b) Rs67 (US$1.5/ADR) for
limited period exclusivity opportunity (generic Arixtra, Allegra OTC, Zyprexa,
Geodon), valued on an NPV basis.
Risks are: (a) delays in approval of niche filings in US Generics business, (b)
slower-than-expected revival of domestic formulations business (c) higher-thanexpected
pain in Betapharm (Germany) operations, and (d) adverse impact of
ruble exchange fluctuation.
No comments:
Post a Comment