Jun 14, 2002|
Ranbaxy: Positive news flow
Ranbaxy has emerged a second time winner in terms of the anti-infective drug, ‘Cefuroxime Axetil’. Glaxo has obtained an injunction from a Chicago court against Apotex, the generic competitor of Ranbaxy to sell generic version of Ceftin in the US market. Now this comes as a big opportunity in disguise for Ranbaxy.
The injunction obtained by Glaxo would mean that Apotex would not be able to launch the drug in US, unless it can vacate the injunction. However, the next hearing on the case is expected only in Dec’ 02 and hence in the meantime Ranbaxy can continue with its ‘technical’ monopoly status on the drug.
To put things in perspective, it may be recalled that Ranbaxy received FDA approval for marketing Cefuroxime Axetil tablets in the US markets after a prolonged legal battle with Glaxo, the original patent holder on the US$ 400 m drug, Ceftin (generic Cefuroxime). The approval didn’t ensure any marketing exclusivity for Ranbaxy. However, due to lack of any other player in the market with necessary approvals, Ranbaxy enjoys ‘technical’ monopoly (in generic version) for marketing the drug. The company received approval for Cefuroxime in Feb'02 and has already enjoyed almost 5 months of exclusivity on the drug. Apotex is the only generic competitor for Ranbaxy and was expected to launch the drug, late this month. However, with Glaxo obtaining injunction against Apotex, Ranbaxy would continue with its monopoly status.
Now let’s analyze the worst and best case scenario for Ranbaxy. Apart from the injunction, Apotex also has to clear a patent infringement case filed by GSK. Glaxo claims that the company infringes certain patents (on the amorphous form), which expire in July’03. To Ranbaxy’s advantage if Apotex doesn’t win the case, it could enjoy monopoly status till July’03 (i.e. 18 months!). Even in the worst case, it seems that the company would continue with its monopoly status till Dec’ 02.
Earlier we had expected entry of Apotex by July’02. Based on that we had targeted a revenue potential of US$ 48 m for Ranbaxy from this. However, in this new scenario the revenues from this generic in the current year (FY03-Dec’02) could well touch US$ 90 m. The contribution to the bottom line from this incremental sales is expected to be huge considering the margins of the company here are anywhere in the range of 70-80%. Consequently, we would be revising our earnings estimates soon.
More Views on News
Aug 14, 2017
A challenging environment and one-time expense pushes Sun Pharma into a loss in the first quarter.
Aug 14, 2017
GST impact coupled with price erosion in US leads to lower profits for the quarter.
Aug 8, 2017
Profits plunge due to higher raw material costs.
Jun 23, 2017
Net Profit lower due to exceptional items in the previous year.
May 30, 2017
US markets decline while other geographies grow in the quarter.
More Views on News
Aug 7, 2017
The data tells us quite a different story from the one the government is trying to project.
Aug 10, 2017
Don't miss these proxy bets on growing companies or in a few years you will be looking back with regret.
Aug 8, 2017
Bharat-22 is one of the most diverse ETFs offered so far by the Government. Know here if you should invest...
Aug 12, 2017
The India VIX is up 36% in the last week. Fear has gone up but is still low by historical standards.
Aug 7, 2017
Raksha Bandhan signifies the brother-sister bond. Here are 7 thoughtful financial gifts for sisters...
Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement. LEGAL DISCLAIMER:
Equitymaster Agora Research Private Limited (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA or Canada, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here
. The performance data quoted represents past performance and does not guarantee future results.SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.
Equitymaster Agora Research Private Limited. 103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: email@example.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407
TRACK RANBAXY LAB
- Track your investment in RANBAXY LAB with Equitymaster's Portfolio Tracker. Set live price alerts, get research alerts and more. Get access now...
- Add To MyStocks