Username : | |
Password : | |
| Register | |
Pharma cos like Aurobindo Pharma, Lupin see uptick in US business
Revival for companies such as Sun Pharma and Dr Reddy's Laboratories, which are under regulatory glare, may be slow
Pharmaceutical companies are expecting higher growth from the US market in FY 17 with quicker product approvals and launch of top selling products.
Over the last several months drug makers from India have faced a slowdown in their US business as Food and Drug Administration (US FDA) inspections led to import alerts and product withdrawals. While the regulatory overhang persists there are signs of growth in the US business for drug majors.
Earlier this month Sun Pharma launched the generic version of Novartis' anti-leukemia drug Gleevec and launch will boost Sun Pharma's US business. The product had total sales of $4.5 billion globally and $2.5 billion in the US, according to IMS data. Sun Pharma has 180-day exclusivity to distribute the product in the US.
According to a Credit Suisse note to investors in first two weeks of sales Sun Pharma has garnered 48% share in Gleevec better than its guidance of 30% during exclusivity period.
Lupin which is days away from concluding its $850 million acquisition of generic drug maker Gavis saw 20% growth in sales in US in Q3 FY 16 and expects the business to grow double digits in FY 17. In a post Q3 result interaction with analysts Lupin's chief executive officer Vinita Gupta said that the pace of product approvals in the US had improved. "We have had one or two products where the approvals came sooner than we had anticipated," she added. Last year Lupin received 22 product approvals and launched 12 products in the US last year.
Dr Reddy's Laboratories which has been at the receiving end of US FDA action and received warning letter for three of its plants last November expects approvals to improve in FY 17 after a tepid FY 16.
Hyderbad-based Aurobindo Pharma secured over 30 product approvals and launched 18-20 of them in the US in first nine months of current fiscal. The company reported over 30% growth in revenue from US market in Q3 on a year-on-year basis.
On the other hand, revival for companies such as Sun Pharma and Dr Reddy's Laboratories, which are under regulatory glare, may be slow, say analysts.
Overall Sun Pharma's US revenue in Q3 declined 11% due to disruption in supplies and remedial measures at Halol plant but its US subsidiary Taro improved results.
"On Halol, we expect Sun Pharma to complete the remediation by mid-FY17 and gradual normalisation of supplies in second half FY17," said J P Morgan in its investor note. Some key drivers over the next year on the stock are Gleevec exclusivity sales, margin expansion from Ranbaxy synergies, abbreviated new drug approvals from other facilities, J P Morgan said in its report.
Source: Business-Standard