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R e j uvenatio n o f ph a rma d e als…
After a lull in CY11, the industry witnessed a rekindling of pharma deals
when Strides Arcolab agreed to sell its Australasian subsidiary Ascent to
Watson at an astounding ~20x EV/EBITDA for a consideration of US$370
million. In the domestic market, Cadila acquired Mumbai based
Biopharma for | 260 crore to strengthen its domestic formulations
business at the fag end of December. CRAMS player Dishman acquired a
French company through its Swiss subsidiary Carbogen. Cadila also
struck a deal with Canada based Microbix to market an anti-clotting drug
in the North American markets.
Ranbaxy formally agreed to a consent degree filed by the US Justice
Department to settle its pending CGMP issues. However, the terms and
conditions came out to be harsher than expected including the
relinquishment of three unknown exclusivities and possibly the same fate
for the remaining five in case of breach of trust.
A few companies reported their Q3FY12 numbers with Lupin, Torrent
and Unichem reporting more or less in-line numbers bolstered by strong
exports growth. The biggest negative surprise was Biocon whose
numbers were affected on account of stagnant Biopharma sales and
lumpy licensing income.
On the IP front, Glenmark got some respite when it received an interim
order from a US arbitration panel against Napo’s termination of
collaboration work for Crofelemer.
Finally, domestic formulations ended the December quarter with growth
of ~17%, thanks to a revival in acute therapies and strong show by most
of the chronic therapies. For the whole of 2011, the market grew ~15%
and for the first time t crossed the | 60000 crore mark.
Corex continued to be the leading brand, which had clocked around | 75
crore in Q3FY12 compared to | 62.5 crore in Q2FY12 and | 49.2 crore in
Q3FY11. For 12 months ending December 2011, the brand clocked sales
of | 237.9 crore compared to | 201 crore in the corresponding previous
period. Corex is the leading brand of Pfizer, which is used for cough.
S e c t o r v i e w
After outperforming the broader market in 2011, the Healthcare index
remained in some sort of a consolidation phase and underperformed the
broader indices (December 16-January 27). We saw some rekindling of
buying activities in frontline stocks on account of the moderation of fiscal
stress and liquidity gush on smaller scale. We have seen profit booking
in some pharma stocks although some low weight companies in the
Healthcare index saw a sudden spike in buying. Going ahead, we expect
residual results by heavyweights along with currency fluctuation to be
the major determinant in the short to medium term. The sector, however,
is still expected to outperform the broader market on account of good
traction from the US supported by product approvals, a growing
presence in Pharmerging markets and a strong foothold in India.
Regulatory approvals
Glenmark gets USFDA nod for two OC drugs
Glenmark Pharmaceuticals has received final approval from the USFDA
for its two generic oral contraceptives tablets. The approvals are for the
oral contraceptive products Norethindrone and Ethinyl Estradiol (Alyacen
TM 1/35) tablets in different strengths. The tablets are generic
equivalents of Ortho-McNeil Janssen's 'Ortho-Novum 1/35-28' tablets and
'Ortho-Novum 7/7/7-28' tablets. According to IMS Health, these products
achieved total market sales of nearly US$96 million for the 12 month
period ending September 2011.
Lupin gets approval for generic Tricor tablets
Lupin Pharmaceuticals has received final approval for its Fenofibrate
tablets, 48 mg and 145 mg strengths from the USFDA. Lupin's
Fenofibrate tablets are the generic equivalent of Abbott Laboratories
(Abbott) Tricor tablets, 48 mg and 145 mg strengths. Tricor is indicated
for cholesterol reduction. Abbot's Tricor tablets, 48 mg and 145 mg had
sales of US$1.3 billion as per IMS Health, September 2011.
Opto Circuits receives approval for MySense a Heart device
Opto Circuits’ subsidiary Cardiac Science has received FDA Clearance for
MySense Heart. The device is small, lightweight and disposable,
enabling patients to wear it comfortably for an extended period of time.
Its ECG signal quality facilitates diagnosis of potentially life-threatening
heart diseases. It is also designed to be ultra low-cost, permitting a much
broader use of the Holter test in the US and emerging markets.
R&D
Biocon’s itolizumab meets main goal
Biocon’s experimental drug itolizumab has met the main goal of a latestage clinical trial, reducing the severity of psoriasis. An interim analysis
of the 200-person study showed that patients taking the drug had a
response rate of 46% after 28 weeks. Biocon plans to speed up
development of the drug for other autoimmune diseases, such as
multiple sclerosis and rheumatoid arthritis, etc. Itolizumab is a
monoclonal antibody. The company is in active discussion with various
MNC players for a possible out-licensing opportunity.
Dr Reddy’s to focus on developing anti-infectives for surgical infections
In a shift of strategic focus, Dr Reddy’s Laboratories is moving away from
cardiovascular diseases (CVD) and diabetes to focus on new chemical
entities (NCEs) related to unmet needs like anti-infectives for surgical
infections apart from pain and dermatology for optimising business
growth. The management has indicated that the company would pursue
the existing candidates in the CVD area to their logical end but it has no
new programmes related to both CVD and diabetes partly because the
costs of clinical trials are too high.
Glenmark gets DCGI approval for Crofelemer
Glenmark Pharmaceuticals has announced that they have obtained the
Drug Controller General of India (DGCI) approval for conduct of the
pivotal study of “Crofelemer” in Acute Watery Diarrhoea patients. Post
approval from the DCGI, dosing in patients has also commenced. This
Phase III study will be done at leading centres in India and Bangladesh.
Eli Lilly-Jubilant call off JV
US drug maker Eli Lilly & Company and Jubilant Life Sciences have called
off their equal drug-discovery partnership to develop molecules across
several therapeutic areas. The 50:50 JV, formed in late 2008 between
Jubilant Life Sciences' wholly-owned subsidiary Jubilant Biosys and Lilly,
was to develop molecules from the pre-clinical to phase II stage across
oncology, diabetes and cardiovascular segments. The firm is called
Vanthys Pharmaceuticals and based in Bangalore.
Orchid-Merck research programme completes pre-clinical trials for antiinfective molecule
Orchid Chemicals & Pharmaceuticals’ research programme with Merck &
Co. Inc. for anti-infection drugs has completed a pre-clinical milestone
and the company has received an initial milestone payment of US$1.5
million from the US-based partner. The two companies entered into an
agreement in September 2008 to focus on the discovery, development
and commercialisation of new drugs to treat bacterial and fungal
infections. Under the terms of the agreement, Orchid is eligible to receive
payments totalling more than US$100 million associated with the
achievement of various research and development milestones.
Deals & Alliances
Biocon’s subsidiary Clinigene ties up with US based Pacific Biomakers
Clinigene International, a subsidiary of Biocon, has entered into a
collaboration agreement with Pacific Biomarkers, a Seattle, Washingtonbased company, for meeting speciality biomarker and high-end clinical
trial laboratory needs of the global pharmaceutical and biotech industry.
Clinigene offers end-to-end clinical and laboratory services for
accelerating clinical research while Pacific Biomarkers is a leader in
providing specialty biomarkers and clinical diagnostic assay services to
discovery and development-based life science enterprises.
Cadila to market Microbix’s Urokinase in the US
Cadila Healthcare and Microbix Biosystems Inc, a Canadian
biotechnology company commercialising novel technologies, have
signed a letter of intent (LoI) to market the Thrombolytic drug Urokinase
in the North American markets. The drug was withdrawn from the market
for three years from 1999 to 2002. Urokinase was acquired by Microbix
in 2008, which has since stepped up efforts to re-introduce the drug in
North America.
New launches
Dr Reddy’s launches Supamove cream in India
Dr Reddy’s has launched Supamove cream, which is in-licensed from the
US-based Cymbiotics Inc in Indian market. The cream is intended to
reduce pain and inflammation in patients with joint pain, arthritis,
bursitis, tendonitis and lower back pain. DRL has also strengthened its
emollients and protective product portfolio with the launch of Venusia
soft lotion. It provides sustained relief from dry and itchy skin (pruritis).
Opto Circuits arm to supply vital signs monitors to Tyumen oblast
Opto Circuits’ subsidiary Criticare Systems Inc., has signed a contract to
supply vital signs monitors to major hospitals in Tyumen Oblast, Russia’s
third-largest province. The purchase is part of Russia’s nationwide
programme to upgrade hospital equipment. Under the agreement
developed by Criticare’s Russian distributor, Elmedica, the company will
provide nGenuity patient monitors, along with installation and training, to
four hospitals, including three regional hospitals.
IP Issues
Roche sues Dr Reddy’s Labs over Valganciclovir Hcl tablets
Swiss Pharma giant Roche has sued Dr. Reddy’s Laboratories (DRL) for
patent infringement of its Valcyte tablets (valganciclovir hydrochloride).
The drug is used as an anti-viral for infections post organ transplant in
HIV patients. The ANDA filed by DRL contained Para IV certification.
Glenmark receives interim order from US arbitration panel
Glenmark Pharmaceuticals has received an interim order from a US
arbitration panel against US-based Napo Pharmaceuticals Inc's
termination of a collaboration pact for an HIV-associated diarrhoea drug.
The pact, signed in July 2005, had conferred exclusive rights to
Glenmark to develop, commercialise and distribute the drug, Crofelemer,
in 140 countries. Napo terminated the pact on November 10, after which
Glenmark sought arbitration. The arbitration panel will hold its next
hearing by the end of March.
Sun settles patent litigation with Sanofi over Plavix
Sun Pharmaceutical Industries has settled its patent case with BristolMyers Squibb (BMS) and Sanofi over Plavix, a drug used to inhibit blood
clots in coronary artery disease. This patent, issued in August 2002,
covers an active ingredient of Plavix called clopidogrel bisulfate and
expires on May 17, 2012. Sun was first sued in July 2008 over generic
Plavix. Plavix is the second-best selling drug in the world with US$6
billion in US annual sales.
M&A Demergers and JVs
Cadila acquire 100% stake in Biochem Pharma
Cadila Healthcare has acquired a 100% stake in Biochem Pharmaceutical
Industries for an undisclosed amount. Biochem is an integrated pharma
player with a presence in therapies such as antibiotics, cardiovascular,
anti-diabetic and oncology. It has reported sales of | 265 crore for FY10-
11. Biochem's top five brands are Ampilox, Biotax, Monotax, Amicin and
Zithrocin, which together account for 40% of the company's sales. Three
of Biochem's brands fall in the top 300 pharma brands of India.
Dishman acquires France based Creapharm Parenterals
Dishman Pharmaceuticals through Carbogen Amcis has acquired
Creapharm Parenterals, a subsidiary of France based Greapharm Group
for an undisclosed amount. Creapharm Parenterals is a contract
development and manufacturing organization specialising in liquid, semisolid and injectable aseptic dosage forms. The acquisition will extend
Carbogen’s comprehensive range of development and manufacturing
services by adding complementary formulation, lyophilisation services
and sterile GMP capabilities for the fast supply of drug products for
preclinical studies and clinical trials (Phase I, II & III).
Fortis completes acquisition of Fortis International
Fortis Healthcare has completed the acquisition of Fortis Healthcare
International by its wholly owned subsidiary, Fortis Asia Healthcare Pte
Ltd (FAHPL) for an agreed valuation of US$665 million. The purchase
consideration for equity shares of Fortis International amounting to
US$262 million, after taking into account the firm's outstanding liabilities,
is being funded through infusion of US$262 million against redeemable
preference shares of FAHPL issued to the promoters of the company.
The shares will carry an annualised yield of 5% and are redeemable after
18 months, with FAHPL having an option to redeem the redeemable
preference shares before the expiry period of 18 months. The agreed
value of US$665 million of Fortis Healthcare International includes assets
pertaining to Dental Corporation Holdings, Australia, Quality Group,
Hong Kong, Hoan My Medical Corporation, Vietnam, Fortis Specialty
Hospital, Singapore, SRL Laboratories, Dubai and a minority stake in
Lanka Hospital Corporation, Sri Lanka.
Strides sells Ascent Pharma for 2.5x sales
Strides has sold its subsidiary (94% holding) Ascent Pharmahealth to
Watson Pharmaceuticals for AU$353 million (US$370 million) in cash.
Ascent Pharmahealth was valued at AU$375 million. Ascent clocked
US$128 million in CY10. The management has indicated sales of Ascent
Pharma for CY11 are around US$154 million in CY11E and EBITDA of
US$19 million. Te deal works out to ~2.5x sales and ~20x EV/EBITDA.
Strides raked in almost 3.2x in profits taking into account the total
acquisition cost of ~US$113 million through 2008-10.
Warning letters
Dr Reddy’s resolves USFDA objection of marketing generic Arixtra
Dr Reddy's Laboratories has resolved an issue involving objections from
the USFDA over the company's promotion of a copy of GlaxoSmithKline
PLC's (GSK) anti-clotting Arixtra injection. The issue relates to the FDA
pulling up DRL for not highlighting important risk information on a
promotional website for fondaprinux sodium injections--the generic
version of Arixtra. It has addressed all matters raised by the FDA's
division for professional promotion and accordingly the USFDA has
closed the matter.
Ranbaxy reaches agreement with US Department of Justice
The US Department of Justice has said it had reached an agreement with
Ranbaxy Laboratories to resolve the company's manufacturing violations.
The proposed settlement filed by the US Justice Department in federal
court in Maryland requires Ranbaxy to stop producing drugs for the US
market at certain facilities until they meet US standards and remove false
data from drug applications and hire an outside expert to review
standards and conditions at plants listed in the suit. As part of the
agreement, Ranbaxy has agreed to relinquish any 180-day marketing
exclusivity that it may have for three pending generic drug applications
and forfeit exclusivity for several additional generic drug applications if it
does not comply with settlement terms, according to a statement from
the FDA. The consent decree requires that Ranbaxy comply with certain
standards before FDA resumes reviewing drug applications containing
data or other information from the Paonta Sahib, Batamandi, and Dewas
facilities.
Financial Results
Biocon posts marginal growth of 1% in revenues YoY
Biocon posted flat growth of 1% YoY to | 518.5 crore, mainly on the back
of lower growth in the Biopharmaceutical business. Biopharma excluding
licensing income grew marginally by 6% on the back of lower production
activities. During the quarter, the company has allocated a part of its
production facility to development programmes. EBITDA margins
declined 734 bps to 24.8% YoY on the back of a sharp increase in the
raw material cost and employee cost. The net profit grew 14% to | 84.9
crore.
Lupin net profit grows by only 5% on higher taxation
Revenues increased by 20.4% YoY to | 1818.9 crore on the back of
healthy growth from across geographies. The company booked forex
loss of | 36 crore during the quarter, which was added in the other
expenditure. EBITDA margins improved 80 bps to 20.5% YoY. Despite
25.6% growth in EBITDA, the net profit grew marginally by 5% | 235.1
crore on the back of higher taxation and depreciation. The company is
planning to launch 25 products in the US market, which includes around
10 oral contraceptives (OCs).
Torrent net profit grows by 8% YoY
Torrent recorded revenue growth of ~21% YoY while EBIDITA margins
were compressed at 17.4% vis-à-vis 20% in the corresponding quarter
last fiscal. The pressure on margins was on account of higher operating
expenses. As a result, the EBIDTA and PAT growth was restricted to 6%
and 8%, respectively. The topline growth was fuelled by exports whereas
domestic formulations continued to languish at a growth rate of around
8-9%.
Unichem net profit declines by 4% YoY
Unichem’s revenues on a standalone basis increased by 13% YoY to
| 222.6 crore mainly due to the depreciation of the rupee against major
currencies, which boosted exports realisation. Exports formulation grew
by 84.1% to | 49.4 crore. EBITDA margins declined ~340 bps to 16.5%
YoY. Net profit declined by 4% to | 24.5 crore.
Other developments
Gujarat high court refuses petition to impose duty on penicillin
A Gujarat high court bench refused to entertain a petition challenging the
Central government’s decision not to impose anti-dumping duty on
penicillin imports. The bench approved the decision of the Union Finance
Ministry, which does not want to impose anti-dumping duty on penicillin
imports. The Union ministry argued that anti-dumping duty on penicillin
imports would lead to antibiotic drugs becoming very expensive. China
and Mexico are the main countries from where local drug manufacturers
import penicillin for manufacture of antibiotics. Vadodara-based Alembic
had challenged the government’s decision arguing that not imposing
duty on penicillin imports hurts local drug manufacturers and
manufacturers of penicillin.
Orchid raises US$100 million though ECB to repay FCCBs
Orchid Chemicals and Pharmaceuticals has received sanction of US$100
million by way of external commercial borrowings (ECBs) from a
consortium of Indian banks to redeem its outstanding foreign currency
convertible bonds (FCCBs), which falls due in February, 2012. The ECBs
and internal accruals would support the company to redeem the
outstanding FCCB of US$117 million along with YTM, which would fall
due in February, 2012. The total redemption value is US$167 million.
R e c o v e r y s e e n i n a nt i - i n f e c t i v e s & G I …
After 13.2% growth in the quarter ended September 2011, the Indian
domestic formulation market grew by 16.9% in the December 2011
quarter according to latest AIOCD data. This was on the back of a
recovery in some acute therapies like anti-infectives and
gastroenterologicals (GI).
On a 12 month moving average total (MAT) basis, the Indian formulation
market grew by 14.9% YoY up to December 2011 as against similar
growth of 14.6% in the corresponding previous period. Higher growth
was driven by anti-diabetic, cardiac, vitamins and dermatological
therapies. The Indian formulations market has crossed a threshold mark
of | 60,000 crore in CY11 and now stands at | 60,375 crore.
The anti-infectives segment recovered after muted growth of 6.9% in
Q2FY12 to 12% in Q3FY12 on the back of extended monsoons. The antiinfective segment is the biggest therapeutic group and accounts for 17%
of the total formulations size. As per MAT December 2011, the growth in
anti-infective segment was 10.8% as against 12.5% in the corresponding
previous period.
Other acute therapies such as GI and respiratory recovered from 9.8%
and 8.4% in Q2FY12 to 14.0% and 18.5%, respectively, in Q3FY12.
However, for the MAT December 2011, the growth was lower at 12.3%
and 13.5% compared to 14.6% and 14.9%, respectively.
After de-growth of 0.5% in Q2FY12, the anti-malarials segment
witnessed strong growth of 14.0% due to extended monsoons during
the quarter. However, for MAT December 2011, the growth was lower
10.2% as against 14.5% as per MAT December 2010.
Cardiac and anti-diabetics continued the growth momentum and grew by
20.4% and 29.2%, respectively, for the quarter ended December 2011
compared to 19.5% and 25% in September 2011. The MAT December
2011 growth was also strong and these therapies grew 19.4% and 24.9%
as against a growth of 16.7% and 22%, respectively, for MAT 2010
December
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
R e j uvenatio n o f ph a rma d e als…
After a lull in CY11, the industry witnessed a rekindling of pharma deals
when Strides Arcolab agreed to sell its Australasian subsidiary Ascent to
Watson at an astounding ~20x EV/EBITDA for a consideration of US$370
million. In the domestic market, Cadila acquired Mumbai based
Biopharma for | 260 crore to strengthen its domestic formulations
business at the fag end of December. CRAMS player Dishman acquired a
French company through its Swiss subsidiary Carbogen. Cadila also
struck a deal with Canada based Microbix to market an anti-clotting drug
in the North American markets.
Ranbaxy formally agreed to a consent degree filed by the US Justice
Department to settle its pending CGMP issues. However, the terms and
conditions came out to be harsher than expected including the
relinquishment of three unknown exclusivities and possibly the same fate
for the remaining five in case of breach of trust.
A few companies reported their Q3FY12 numbers with Lupin, Torrent
and Unichem reporting more or less in-line numbers bolstered by strong
exports growth. The biggest negative surprise was Biocon whose
numbers were affected on account of stagnant Biopharma sales and
lumpy licensing income.
On the IP front, Glenmark got some respite when it received an interim
order from a US arbitration panel against Napo’s termination of
collaboration work for Crofelemer.
Finally, domestic formulations ended the December quarter with growth
of ~17%, thanks to a revival in acute therapies and strong show by most
of the chronic therapies. For the whole of 2011, the market grew ~15%
and for the first time t crossed the | 60000 crore mark.
Corex continued to be the leading brand, which had clocked around | 75
crore in Q3FY12 compared to | 62.5 crore in Q2FY12 and | 49.2 crore in
Q3FY11. For 12 months ending December 2011, the brand clocked sales
of | 237.9 crore compared to | 201 crore in the corresponding previous
period. Corex is the leading brand of Pfizer, which is used for cough.
S e c t o r v i e w
After outperforming the broader market in 2011, the Healthcare index
remained in some sort of a consolidation phase and underperformed the
broader indices (December 16-January 27). We saw some rekindling of
buying activities in frontline stocks on account of the moderation of fiscal
stress and liquidity gush on smaller scale. We have seen profit booking
in some pharma stocks although some low weight companies in the
Healthcare index saw a sudden spike in buying. Going ahead, we expect
residual results by heavyweights along with currency fluctuation to be
the major determinant in the short to medium term. The sector, however,
is still expected to outperform the broader market on account of good
traction from the US supported by product approvals, a growing
presence in Pharmerging markets and a strong foothold in India.
Regulatory approvals
Glenmark gets USFDA nod for two OC drugs
Glenmark Pharmaceuticals has received final approval from the USFDA
for its two generic oral contraceptives tablets. The approvals are for the
oral contraceptive products Norethindrone and Ethinyl Estradiol (Alyacen
TM 1/35) tablets in different strengths. The tablets are generic
equivalents of Ortho-McNeil Janssen's 'Ortho-Novum 1/35-28' tablets and
'Ortho-Novum 7/7/7-28' tablets. According to IMS Health, these products
achieved total market sales of nearly US$96 million for the 12 month
period ending September 2011.
Lupin gets approval for generic Tricor tablets
Lupin Pharmaceuticals has received final approval for its Fenofibrate
tablets, 48 mg and 145 mg strengths from the USFDA. Lupin's
Fenofibrate tablets are the generic equivalent of Abbott Laboratories
(Abbott) Tricor tablets, 48 mg and 145 mg strengths. Tricor is indicated
for cholesterol reduction. Abbot's Tricor tablets, 48 mg and 145 mg had
sales of US$1.3 billion as per IMS Health, September 2011.
Opto Circuits receives approval for MySense a Heart device
Opto Circuits’ subsidiary Cardiac Science has received FDA Clearance for
MySense Heart. The device is small, lightweight and disposable,
enabling patients to wear it comfortably for an extended period of time.
Its ECG signal quality facilitates diagnosis of potentially life-threatening
heart diseases. It is also designed to be ultra low-cost, permitting a much
broader use of the Holter test in the US and emerging markets.
R&D
Biocon’s itolizumab meets main goal
Biocon’s experimental drug itolizumab has met the main goal of a latestage clinical trial, reducing the severity of psoriasis. An interim analysis
of the 200-person study showed that patients taking the drug had a
response rate of 46% after 28 weeks. Biocon plans to speed up
development of the drug for other autoimmune diseases, such as
multiple sclerosis and rheumatoid arthritis, etc. Itolizumab is a
monoclonal antibody. The company is in active discussion with various
MNC players for a possible out-licensing opportunity.
Dr Reddy’s to focus on developing anti-infectives for surgical infections
In a shift of strategic focus, Dr Reddy’s Laboratories is moving away from
cardiovascular diseases (CVD) and diabetes to focus on new chemical
entities (NCEs) related to unmet needs like anti-infectives for surgical
infections apart from pain and dermatology for optimising business
growth. The management has indicated that the company would pursue
the existing candidates in the CVD area to their logical end but it has no
new programmes related to both CVD and diabetes partly because the
costs of clinical trials are too high.
Glenmark gets DCGI approval for Crofelemer
Glenmark Pharmaceuticals has announced that they have obtained the
Drug Controller General of India (DGCI) approval for conduct of the
pivotal study of “Crofelemer” in Acute Watery Diarrhoea patients. Post
approval from the DCGI, dosing in patients has also commenced. This
Phase III study will be done at leading centres in India and Bangladesh.
Eli Lilly-Jubilant call off JV
US drug maker Eli Lilly & Company and Jubilant Life Sciences have called
off their equal drug-discovery partnership to develop molecules across
several therapeutic areas. The 50:50 JV, formed in late 2008 between
Jubilant Life Sciences' wholly-owned subsidiary Jubilant Biosys and Lilly,
was to develop molecules from the pre-clinical to phase II stage across
oncology, diabetes and cardiovascular segments. The firm is called
Vanthys Pharmaceuticals and based in Bangalore.
Orchid-Merck research programme completes pre-clinical trials for antiinfective molecule
Orchid Chemicals & Pharmaceuticals’ research programme with Merck &
Co. Inc. for anti-infection drugs has completed a pre-clinical milestone
and the company has received an initial milestone payment of US$1.5
million from the US-based partner. The two companies entered into an
agreement in September 2008 to focus on the discovery, development
and commercialisation of new drugs to treat bacterial and fungal
infections. Under the terms of the agreement, Orchid is eligible to receive
payments totalling more than US$100 million associated with the
achievement of various research and development milestones.
Deals & Alliances
Biocon’s subsidiary Clinigene ties up with US based Pacific Biomakers
Clinigene International, a subsidiary of Biocon, has entered into a
collaboration agreement with Pacific Biomarkers, a Seattle, Washingtonbased company, for meeting speciality biomarker and high-end clinical
trial laboratory needs of the global pharmaceutical and biotech industry.
Clinigene offers end-to-end clinical and laboratory services for
accelerating clinical research while Pacific Biomarkers is a leader in
providing specialty biomarkers and clinical diagnostic assay services to
discovery and development-based life science enterprises.
Cadila to market Microbix’s Urokinase in the US
Cadila Healthcare and Microbix Biosystems Inc, a Canadian
biotechnology company commercialising novel technologies, have
signed a letter of intent (LoI) to market the Thrombolytic drug Urokinase
in the North American markets. The drug was withdrawn from the market
for three years from 1999 to 2002. Urokinase was acquired by Microbix
in 2008, which has since stepped up efforts to re-introduce the drug in
North America.
New launches
Dr Reddy’s launches Supamove cream in India
Dr Reddy’s has launched Supamove cream, which is in-licensed from the
US-based Cymbiotics Inc in Indian market. The cream is intended to
reduce pain and inflammation in patients with joint pain, arthritis,
bursitis, tendonitis and lower back pain. DRL has also strengthened its
emollients and protective product portfolio with the launch of Venusia
soft lotion. It provides sustained relief from dry and itchy skin (pruritis).
Opto Circuits arm to supply vital signs monitors to Tyumen oblast
Opto Circuits’ subsidiary Criticare Systems Inc., has signed a contract to
supply vital signs monitors to major hospitals in Tyumen Oblast, Russia’s
third-largest province. The purchase is part of Russia’s nationwide
programme to upgrade hospital equipment. Under the agreement
developed by Criticare’s Russian distributor, Elmedica, the company will
provide nGenuity patient monitors, along with installation and training, to
four hospitals, including three regional hospitals.
IP Issues
Roche sues Dr Reddy’s Labs over Valganciclovir Hcl tablets
Swiss Pharma giant Roche has sued Dr. Reddy’s Laboratories (DRL) for
patent infringement of its Valcyte tablets (valganciclovir hydrochloride).
The drug is used as an anti-viral for infections post organ transplant in
HIV patients. The ANDA filed by DRL contained Para IV certification.
Glenmark receives interim order from US arbitration panel
Glenmark Pharmaceuticals has received an interim order from a US
arbitration panel against US-based Napo Pharmaceuticals Inc's
termination of a collaboration pact for an HIV-associated diarrhoea drug.
The pact, signed in July 2005, had conferred exclusive rights to
Glenmark to develop, commercialise and distribute the drug, Crofelemer,
in 140 countries. Napo terminated the pact on November 10, after which
Glenmark sought arbitration. The arbitration panel will hold its next
hearing by the end of March.
Sun settles patent litigation with Sanofi over Plavix
Sun Pharmaceutical Industries has settled its patent case with BristolMyers Squibb (BMS) and Sanofi over Plavix, a drug used to inhibit blood
clots in coronary artery disease. This patent, issued in August 2002,
covers an active ingredient of Plavix called clopidogrel bisulfate and
expires on May 17, 2012. Sun was first sued in July 2008 over generic
Plavix. Plavix is the second-best selling drug in the world with US$6
billion in US annual sales.
M&A Demergers and JVs
Cadila acquire 100% stake in Biochem Pharma
Cadila Healthcare has acquired a 100% stake in Biochem Pharmaceutical
Industries for an undisclosed amount. Biochem is an integrated pharma
player with a presence in therapies such as antibiotics, cardiovascular,
anti-diabetic and oncology. It has reported sales of | 265 crore for FY10-
11. Biochem's top five brands are Ampilox, Biotax, Monotax, Amicin and
Zithrocin, which together account for 40% of the company's sales. Three
of Biochem's brands fall in the top 300 pharma brands of India.
Dishman acquires France based Creapharm Parenterals
Dishman Pharmaceuticals through Carbogen Amcis has acquired
Creapharm Parenterals, a subsidiary of France based Greapharm Group
for an undisclosed amount. Creapharm Parenterals is a contract
development and manufacturing organization specialising in liquid, semisolid and injectable aseptic dosage forms. The acquisition will extend
Carbogen’s comprehensive range of development and manufacturing
services by adding complementary formulation, lyophilisation services
and sterile GMP capabilities for the fast supply of drug products for
preclinical studies and clinical trials (Phase I, II & III).
Fortis completes acquisition of Fortis International
Fortis Healthcare has completed the acquisition of Fortis Healthcare
International by its wholly owned subsidiary, Fortis Asia Healthcare Pte
Ltd (FAHPL) for an agreed valuation of US$665 million. The purchase
consideration for equity shares of Fortis International amounting to
US$262 million, after taking into account the firm's outstanding liabilities,
is being funded through infusion of US$262 million against redeemable
preference shares of FAHPL issued to the promoters of the company.
The shares will carry an annualised yield of 5% and are redeemable after
18 months, with FAHPL having an option to redeem the redeemable
preference shares before the expiry period of 18 months. The agreed
value of US$665 million of Fortis Healthcare International includes assets
pertaining to Dental Corporation Holdings, Australia, Quality Group,
Hong Kong, Hoan My Medical Corporation, Vietnam, Fortis Specialty
Hospital, Singapore, SRL Laboratories, Dubai and a minority stake in
Lanka Hospital Corporation, Sri Lanka.
Strides sells Ascent Pharma for 2.5x sales
Strides has sold its subsidiary (94% holding) Ascent Pharmahealth to
Watson Pharmaceuticals for AU$353 million (US$370 million) in cash.
Ascent Pharmahealth was valued at AU$375 million. Ascent clocked
US$128 million in CY10. The management has indicated sales of Ascent
Pharma for CY11 are around US$154 million in CY11E and EBITDA of
US$19 million. Te deal works out to ~2.5x sales and ~20x EV/EBITDA.
Strides raked in almost 3.2x in profits taking into account the total
acquisition cost of ~US$113 million through 2008-10.
Warning letters
Dr Reddy’s resolves USFDA objection of marketing generic Arixtra
Dr Reddy's Laboratories has resolved an issue involving objections from
the USFDA over the company's promotion of a copy of GlaxoSmithKline
PLC's (GSK) anti-clotting Arixtra injection. The issue relates to the FDA
pulling up DRL for not highlighting important risk information on a
promotional website for fondaprinux sodium injections--the generic
version of Arixtra. It has addressed all matters raised by the FDA's
division for professional promotion and accordingly the USFDA has
closed the matter.
Ranbaxy reaches agreement with US Department of Justice
The US Department of Justice has said it had reached an agreement with
Ranbaxy Laboratories to resolve the company's manufacturing violations.
The proposed settlement filed by the US Justice Department in federal
court in Maryland requires Ranbaxy to stop producing drugs for the US
market at certain facilities until they meet US standards and remove false
data from drug applications and hire an outside expert to review
standards and conditions at plants listed in the suit. As part of the
agreement, Ranbaxy has agreed to relinquish any 180-day marketing
exclusivity that it may have for three pending generic drug applications
and forfeit exclusivity for several additional generic drug applications if it
does not comply with settlement terms, according to a statement from
the FDA. The consent decree requires that Ranbaxy comply with certain
standards before FDA resumes reviewing drug applications containing
data or other information from the Paonta Sahib, Batamandi, and Dewas
facilities.
Financial Results
Biocon posts marginal growth of 1% in revenues YoY
Biocon posted flat growth of 1% YoY to | 518.5 crore, mainly on the back
of lower growth in the Biopharmaceutical business. Biopharma excluding
licensing income grew marginally by 6% on the back of lower production
activities. During the quarter, the company has allocated a part of its
production facility to development programmes. EBITDA margins
declined 734 bps to 24.8% YoY on the back of a sharp increase in the
raw material cost and employee cost. The net profit grew 14% to | 84.9
crore.
Lupin net profit grows by only 5% on higher taxation
Revenues increased by 20.4% YoY to | 1818.9 crore on the back of
healthy growth from across geographies. The company booked forex
loss of | 36 crore during the quarter, which was added in the other
expenditure. EBITDA margins improved 80 bps to 20.5% YoY. Despite
25.6% growth in EBITDA, the net profit grew marginally by 5% | 235.1
crore on the back of higher taxation and depreciation. The company is
planning to launch 25 products in the US market, which includes around
10 oral contraceptives (OCs).
Torrent net profit grows by 8% YoY
Torrent recorded revenue growth of ~21% YoY while EBIDITA margins
were compressed at 17.4% vis-à-vis 20% in the corresponding quarter
last fiscal. The pressure on margins was on account of higher operating
expenses. As a result, the EBIDTA and PAT growth was restricted to 6%
and 8%, respectively. The topline growth was fuelled by exports whereas
domestic formulations continued to languish at a growth rate of around
8-9%.
Unichem net profit declines by 4% YoY
Unichem’s revenues on a standalone basis increased by 13% YoY to
| 222.6 crore mainly due to the depreciation of the rupee against major
currencies, which boosted exports realisation. Exports formulation grew
by 84.1% to | 49.4 crore. EBITDA margins declined ~340 bps to 16.5%
YoY. Net profit declined by 4% to | 24.5 crore.
Other developments
Gujarat high court refuses petition to impose duty on penicillin
A Gujarat high court bench refused to entertain a petition challenging the
Central government’s decision not to impose anti-dumping duty on
penicillin imports. The bench approved the decision of the Union Finance
Ministry, which does not want to impose anti-dumping duty on penicillin
imports. The Union ministry argued that anti-dumping duty on penicillin
imports would lead to antibiotic drugs becoming very expensive. China
and Mexico are the main countries from where local drug manufacturers
import penicillin for manufacture of antibiotics. Vadodara-based Alembic
had challenged the government’s decision arguing that not imposing
duty on penicillin imports hurts local drug manufacturers and
manufacturers of penicillin.
Orchid raises US$100 million though ECB to repay FCCBs
Orchid Chemicals and Pharmaceuticals has received sanction of US$100
million by way of external commercial borrowings (ECBs) from a
consortium of Indian banks to redeem its outstanding foreign currency
convertible bonds (FCCBs), which falls due in February, 2012. The ECBs
and internal accruals would support the company to redeem the
outstanding FCCB of US$117 million along with YTM, which would fall
due in February, 2012. The total redemption value is US$167 million.
R e c o v e r y s e e n i n a nt i - i n f e c t i v e s & G I …
After 13.2% growth in the quarter ended September 2011, the Indian
domestic formulation market grew by 16.9% in the December 2011
quarter according to latest AIOCD data. This was on the back of a
recovery in some acute therapies like anti-infectives and
gastroenterologicals (GI).
On a 12 month moving average total (MAT) basis, the Indian formulation
market grew by 14.9% YoY up to December 2011 as against similar
growth of 14.6% in the corresponding previous period. Higher growth
was driven by anti-diabetic, cardiac, vitamins and dermatological
therapies. The Indian formulations market has crossed a threshold mark
of | 60,000 crore in CY11 and now stands at | 60,375 crore.
The anti-infectives segment recovered after muted growth of 6.9% in
Q2FY12 to 12% in Q3FY12 on the back of extended monsoons. The antiinfective segment is the biggest therapeutic group and accounts for 17%
of the total formulations size. As per MAT December 2011, the growth in
anti-infective segment was 10.8% as against 12.5% in the corresponding
previous period.
Other acute therapies such as GI and respiratory recovered from 9.8%
and 8.4% in Q2FY12 to 14.0% and 18.5%, respectively, in Q3FY12.
However, for the MAT December 2011, the growth was lower at 12.3%
and 13.5% compared to 14.6% and 14.9%, respectively.
After de-growth of 0.5% in Q2FY12, the anti-malarials segment
witnessed strong growth of 14.0% due to extended monsoons during
the quarter. However, for MAT December 2011, the growth was lower
10.2% as against 14.5% as per MAT December 2010.
Cardiac and anti-diabetics continued the growth momentum and grew by
20.4% and 29.2%, respectively, for the quarter ended December 2011
compared to 19.5% and 25% in September 2011. The MAT December
2011 growth was also strong and these therapies grew 19.4% and 24.9%
as against a growth of 16.7% and 22%, respectively, for MAT 2010
December
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