Analysts feel that while it is an upcoming player in the injectable space, it still has a long way to go before it can rival peers like Sun Pharma, Dr. Reddy's Laboratories and Mylan.
Deepak Malik, an analyst with Edelweiss said, "Aurobindo has a clear intent to grow its injectables business in the US. It launched its first Penem injectable in the US in FY18 and is in the process of launching one more in the US and Europe. Aurobindo has filed drug master files for Somatuline-depot and Sandostatin-LAR (endocrine tumour related injectables) and has started clinical trials for amphotericin lipsomal injection (anti-fungal)."
Talking to analysts post its second-quarter results, Aurobindo Pharma Managing Director N Govindarajan had said that as far as depot injections are concerned, the filings might happen by mid-to-end of next year.
"As far as Depot Injections are concerned, we need to wait for some more time because the endpoint studies would take some time. So hopefully if we file by mid-to-end of next year, you need to wait for 18-months for approval. In Depot injections, you have to remember one important aspect. The first product is very crucial which establishes the release profile. So after that every year you can see one product being filed," he had said.
The company is also adding capacities - it recently commissioned a betalactum injectables facility in Telangana that would export to the US, EU and emerging markets. It is also in the process of setting up a non-Betalactum injectable facility in the US.
Malik, however, pointed out that while there are several near-term growth triggers, ensuing costs are expected to outweigh the opportunities as Aurobindo conducts trials for depot-injectables, the product under development (a dry powder inhaler) that it acquired from Advent Pharma, as well as its oncology biosimilar bevacizumab.
As for Advent's product, Govindarajan has indicated, "Will start with US market and then go for other countries. China can be an interesting opportunity."
On the biosimilars front, it expects the first filing to happen around 2021 and get approval in 2022. US approval can happen in a period of 12-18 months.
This will push its R&D expenditure, which is expected to go up to around 5 per cent of revenues. When trials enter advance stages, the R&D cost may go up to 8-9 per cent of revenues.
Over the past four years, Aurobindo has invested $800mn in an aggressive inorganic strategy across US and Europe, and doubled revenue from $1.3 billion in FY14 to $2.6 billion in FY18.
In Europe, the company acquired products from Actavis in FY15 to strengthen its formulations presence in those markets, while in FY17 it acquired Portugal-based Generis Farmaceutica. In the US, ARBP recently announced the acquisition of Sandoz’s carved-out US business, which comprises 300 molecules and is expected to add $ 900 million in sales post consolidation.
However, analysts felt that growing the $2-billion portfolio in the US will be a challenge given that half of it comes from the declining Sandoz’s derma and oral solids portfolios.