US business accounts for 40-50 per cent of revenue for Lupin and Sun Pharmaceuticals.
Earlier this month, Sun Pharmaceutical Industries launched the generic version there of Novartis’ anti-leukemia drug, Gleevec. The product had total annual sales of $4.5 billion globally and $2.5 bn in the US, according to IMS data. Sun Pharma has a 180-day exclusivity period to distribute the product in the US.
According to a Credit Suisse note to investors, in the first two weeks of sales, Sun garnered a 48 per cent share of the market for Gleevec, better than its official expectation of 30 per cent during the exclusivity period.
Lupin, days away from concluding a $850-million acquisition of generic drug maker Gavis, saw 20 per cent growth in US sales in the December quarter (Q3 of FY16) and expects the business to grow in double digits during FY17. After the results were announced, in an interaction with analysts, chief executive officer Vinita Gupta said 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 said.
Last year, Lupin received 22 product approvals there and launched 12.
Dr Reddy's Laboratories, at the receiving end of FDA action and having got a warning letter for three of its units last November, expects approvals to improve in FY17, after a tepid FY 16. Glenmark is hoping for a big growth from the US market in FY 17. Their anti cholesterol drug Zetia is expected to be the key revenue generator. Hyderabad-based Aurobindo Pharma secured around 30 product approvals and launched 18-20 of these in the US in the first nine months of this financial year. The company reported a 30-plus per cent growth in revenue from that market in Q3, year on year.
However, add analysts, US sales revival for Sun and Dr Reddy's, under a regulatory glare, could be slow. Sun's US revenue in Q3 declined 11 per cent due to disruption in supplies and remedial measures at its Halol (Gujarat) unit. Taro, its US subsidiary, had improved results.
“On Halol, we expect Sun to complete the remediation by mid-FY17 and gradual normalisation of supplies in the second half,” said JPMorgan in an investor note. Some key drivers over the next year on the stock are Gleevec exclusivity sales, margin expansion from Ranbaxy (which it took over) synergies and abbreviated new drug approvals from other facilities, it added.
SITUATION AT HAND
Earlier this month Sun Pharma launched the generic version of Novartis’ anti-leukemia drug Gleevec, which will boost its US business.
The product had total sales of $4.5 billion globally and $2.5 billion in the US, according to IMS data
Lupin eyeing 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 in double digits in FY 17