Glenmark has launched FabiFlu at Rs 103 per tablet. India is adding more than 14,000 cases of Covid positive patients a day, of which 70-80 per cent are mild and would need favipiravir.
“The price will reduce by over 50 per cent in the next two months. This drug has a short-term window — only as long as the pandemic lasts. Therefore, companies
will rush to launch,” said an analyst. Glenmark is thus conducting trials on a combination therapy of Favipiravir with Umifenovir.
Amey Chalke at Haitong Securities says Glenmark could rake in Rs 40-50 crore in revenues, which is 10-12 per cent of the total Covid-19 opportunity. However, analysts are keeping an eye out for new launches by the competition, and are hence unsure regarding actual revenues. Consequently, Chalke says while there may not be an earnings upgrade immediately, there is still scope for a PE re-rating. Analysts at ICICI Securities say it is very difficult to estimate the financial impact considering uncertainty over potential Covid patients and its longevity.
They have raised their target price to factor in equity multiples of 15x, up from 12x, by pricing in the potential upside from Favipiravir as well as the strong R&D capability. They maintain a ‘buy’ rating, with a revised target price of Rs 488 on Glenmark, based on 15x its FY22 earnings estimates (from the earlier Rs 390).
Meanwhile, Cipla is readying the launch of Remdesivir in an injectable form. Being needed to be administered through the intravenous route, the drug will be sold only to hospitals — mostly government-run — which are providing treatment for Covid patients.
Besides Cipla, Hetero Drugs has received a nod for manufacturing, after it entered into non-exclusive licensing agreements with US pharma giant Gilead Sciences, which is the patent holder of the drug.
Analysts say others like Cadila Healthcare, Dr Reddy’s Laboratories, and Jubilant Life Sciences are also likely to follow suit and hence, India will be a multi-player market.
Remdesivir may cost Rs 5,000 per vial. The drug is cheaper than products made by Bangladesh-based firms, as the API (active pharmaceutical ingredient) is made in India. A senior government official, however, said they were keeping a watch on price movement. “The cost of production for Remdesivir is also high. But we are keeping a watch on how different companies
price it,” he said.
Besides, a company that is yet to launch the injectable Remedesivir said it may price it less than Rs 5,000 per vial. This shows how competitive the space could get. Assuming Cipla can garner all initial orders from the Maharashtra government, it could cash in on a Rs 30-crore opportunity, said an analyst at a domestic brokerage.