Cipla's stock touched a 52-week high on Thursday and ended the day's trade on BSE at Rs 579.5 a piece, up 13 per cent from previous close, as the approval for the drug came in earlier than expected.
Lupin also has a filing for albuterol in the US and analysts expect the USFDA
may prioritise the approval now. Shares of Lupin, too, went up by 11.6 per cent on Thursday. "Lupin's filings for albuterol are from plants that are 'safe' meaning not under the USFDA
scanner. Therefore, its prospects look good," said an analyst. Albuterol inhalation aerosol market in the US is estimated to be around $2.8 billion. According to IQVIA estimates, the market size for Merck Sharp and Dohme Corp's Proventil and its authorised generic equivalent had US sales of around $153 million in the past 12 months.
This approval also improves Cipla's prospects in the US market, which had seen subdued growth in the recent past. Analysts said while they were expecting an approval around Q4FY21, it came in earlier. "We were expecting the approval in Q4FY21 and only limited sales in FY21. We estimate FY22 sales of $50-60 million," said Ankit Hatalkar of Edelweiss.
The importance of this drug has enhanced in the backdrop of the growing Covid-19 pandemic that is causing severe respiratory illness in several patients. In a statement, the USFDA
said: “The USFDA recognises the increased demand for albuterol products during the novel coronavirus
pandemic. We remain committed to facilitating access to medical products." In the US, more than 26 million people are known to have asthma, about 7 million of them are children.
This is the second positive announcement by Cipla
for its US respiratory portfolio. Last Friday, it had announced successful completion of phase 3 clinical studies for generic Advair, which paves the way for an abbreviated new drug application (ANDA) filing soon.
While analysts expect the ANDA filing in next 3-4 months, being a complex product and based on past experience with other players (Mylan, Hikma, Sandoz), analysts at Emkay Global say that it is highly likely that the approval pathway will be longer than the usual one-year cycle. While some analysts expect its launch by FY22, others expect it by FY23, as a third generic in the market. The good part is that Cipla
will have a two-year lead over the fourth entrant.
Umang Vohra, MD and global CEO, Cipla, said: “Albuterol is the first generic metered dose inhaler of Proventil ever approved by USFDA and Cipla’s is the first device-based inhalation product in the market." The company is planning shipments of this drug in a staggered manner and would also donate some products.
Analysts at Kotak Institutional Equities had earlier said that filing of Advair will add to Cipla's medium-term growth visibility (FY22-24). While they expect more filings from the inhalation pipeline, they see Advair as a long-tailed product that now adds significant optionality (Rs 30 per share net present value).