INDIAN PHARMA ON GLOBAL STAGE
A strong surge in demand in the domestic market on account of endemic diseases, and exclusively of key drugs in the US generic market will drive growth for major Indian companies such as Cipla, Ranbaxy and Dr Reddyâ€™s during this fiscal.
Outbreak of diseases such as Chikungunya and Dengue during the last couple of months will be a major factor which would lead to an average top line growth of around 45% Year-on-Year, and nearly 9% Quarter-on-Quarter for most pharmaceutical companies this quarter. Analysts say, adding that profits may grow by 15% quarter-on-quarter.
This is because of the huge surge in demand for anti-infective products across the country. Companies with a wide domestic presence are likely to benefit the most during the quarter. Also, generic companies are likely to benefit from exclusivities with the launch of key drugs in the US market.
In June 2006, companies have either launched or have tied up with drug MNCs to launch generic versions in the US market. Products such as simvastatin, finasteride ad sertraline have been launched with exclusivities.
Cipla is supplying the active pharmaceutical ingredient to Israel-based Teva for its 180-day exclusivity in the case of sertraline (brand named Zoloft), and formulations to Teva in the case of finasteride (brand name Proscar), while Dr. Reddyâ€™s launched the authorized generic version of Proscar (finasteride) and Zocor (simastatin) in a deal with Merck.
According to IMS, sales of Pfizerâ€™s Zoloft (sertraline) were about $3.1 billion for the 12 month ended period. The launch of exclusivity based new products would be one of the prime factors that have a positive impact on companies.
For instance, in case of simvastatin, Ranbaxy has a 180-day exclusivity for Zocor 80 mg tablets, sales of which where $513 million in the US. Analysts expect the drug could fetch around $50 million in revenue during the six-month period.
In the first month or so from the launch of Simvastatin, Ranbaxy garnered over 50% share of this segment in the US generics markets. During the 180-day exclusivity period, we anticipate commercial benefits to accrue. In India, Ranbaxy holds the No.1 position by market share and sales. This can be attributed to our focus on high growth segments, launching of innovative and new product successes.
Among other generic companies in the US, orchid is expected to show decent growth with its recent launch of cefazolin vials and continued sales from key product, ceftriaxone, analysts say. However, the European market seems to be challenging for all players with Dr Reddyâ€™s being impacted the most.
To conclude, besides gaining from exclusivities with the launch of key drugs in the US, outbreak of diseases and demand for anti-infective products are major contributors to growth. Industry expects top-line to grow 45% year-on-year for most pharmaceutical companies.