X

Sign up for Equitymaster's free daily newsletter, The 5 Minute WrapUp and get access to our latest Multibagger guide (2019 Edition) on picking money-making stocks.

This is an entirely free service. No payments are to be made.


Download Now Subscribe to our free daily e-letter, The 5 Minute WrapUp and get this complimentary report.
We hate spam as much as you do. Check out our Privacy Policy and Terms Of Use.
Pharma: A second wave of generics opportunity - Views on News from Equitymaster

Helping You Build Wealth With Honest Research
Since 1996. Try Now

  • MyStocks

MEMBER'S LOGINX

     
Login Failure
   
     
   
     
 
 
 
(Please do not use this option on a public machine)
 
     
 
 
 
  Sign Up | Forgot Password?  

Pharma: A second wave of generics opportunity

Jul 2, 2010

Generic companies thrive when a large number of drugs lose patents. This largely holds true in the US generics market. After all, it is the biggest pharma market in the world. At the same time, because of the big opportunity there, many generic companies have made a beeline for the US. And the result -competition in this space has intensified. And prices have crashed. The only way to survive in this market then is to keep up the flow of product launches. And also identify products that have limited competition. The years 2006 and 2007 were particularly good for the global generics industry. This is when a large number of blockbuster drugs went off patent. After a lull, another generics opportunity now beckons especially for Indian pharma companies.

Between the years 2011 and 2013, a large number of drugs are expected to lose patents. These drugs represent US$ 80 bn in innovator sales. Thus, even after factoring in for competition and price erosion, the opportunity available is still better than what would have been otherwise.

Making the most of it

So how are Indian pharma companies geared to capitalise on this opportunity? The crux is 'products with limited competition'.

In this regard, Dr. Reddy's, Ranbaxy, Sun Pharma, Lupin, and Glenmark have some opportunities lined up. The biggest, however, seems to lie with Dr. Reddy's and Ranbaxy.

  • Dr. Reddy's: The company has made a conscious effort of focusing on niche products so that revenue and profit potential is higher. The company has several such opportunities lined up over the next three years. These are products with exclusivity periods. Products which are difficult to manufacture. Products for which it has settled legal suits with innovator companies among others. Little wonder then that the domestic pharma major has touted the US market to be a major growth driver going forward. The company has envisaged generating sales to the tune of US$ 3 bn by 2013. And the US is expected to be a big part of it. The major challenge then to Dr. Reddy's in this market will be delay in receiving approvals for all these products.

  • Ranbaxy: The company had outlined a strategy of launching one product with the exclusivity window every year. And it was also able to strike deals in this regard. For instance, GSK Plc's 'Imitrex' was an opportunity in 2008. Then there was 'Valtrex' in 2009. 'Flomax' in 2010. And the biggest of them all 'Lipitor' in 2011. Not just that there is another opportunity in the form of 'Nexium'. The latter is the second largest drug in the world. The biggest problem for Ranbaxy is its ongoing troubles with the US FDA. And so even with an ompressive product line up, the launch of some them is uncertain. Take 'Imitrex' for example. The company lost out on the opportunity to capitalise on this drug as the approval from the US FDA got significantly delayed. The silver lining in the cloud is that it was able to launch 'Valtrex' on time. And thus amass substantial revenues from the same. Now 'Lipitor' beckons next year. Even though one can reasonably assume that Ranbaxy will do all that it can to make this launch happen, its fate will finally be decided by the US regulator.
Going forward…

It is becoming increasingly clear that Indian pharma companies will have to do something extra special. This is more so if they want to sustain their revenues and profits in the highly competitive US generics market. No longer is it a simple case of competing in the market only on the basis of price.


Equitymaster requests your view! Post a comment on "Pharma: A second wave of generics opportunity". Click here!

1 Responses to "Pharma: A second wave of generics opportunity"

K P BHAT

Jul 15, 2010

How about 1,,. PIRAMAL HEALTHCARE /2. ZYDUS WELLNESS
3.TORENT PHARM?

Like 
  
Equitymaster requests your view! Post a comment on "Pharma: A second wave of generics opportunity". Click here!

More Views on News

CAPLIN POINT Surges by 6%; BSE HEALTHCARE Index Up 0.3% (Market Updates)

May 22, 2019 | Updated on May 22, 2019

CAPLIN POINT share price has surged by 6% and its current market price is Rs 390. The BSE HEALTHCARE is up by 0.3%. The top gainers in the BSE HEALTHCARE Index are CAPLIN POINT (up 6.1%) and J.B.CHEMICALS (up 5.5%). The top losers are GLENMARK PHARMA and SUVEN LIFESCIENCES (down 0.4%).

ERIS LIFESCIENCES LIMITED Plunges by 6%; BSE HEALTHCARE Index Up 0.1% (Market Updates)

May 22, 2019 | Updated on May 22, 2019

ERIS LIFESCIENCES LIMITED share price has plunged by 6% and its current market price is Rs 595. The BSE HEALTHCARE is up by 0.1%. The top gainers in the BSE HEALTHCARE Index are J.B.CHEMICALS (up 5.0%) and NARAYANA HRUDAYALAYA LTD (up 2.8%). The top losers is ERIS LIFESCIENCES LIMITED (down 5.8%)..

J.B.CHEMICALS Surges by 5%; BSE HEALTHCARE Index Down 0.2% (Market Updates)

May 22, 2019 | Updated on May 22, 2019

J.B.CHEMICALS share price has surged by 5% and its current market price is Rs 366. The BSE HEALTHCARE is down by 0.2%. The top gainers in the BSE HEALTHCARE Index is J.B.CHEMICALS (up 5.5%). The top losers are ABBOTT INDIA and WOCKHARDT (down 0.1%).

FDC LTD. Surges by 7%; BSE HEALTHCARE Index Up 0.2% (Market Updates)

May 22, 2019 | Updated on May 22, 2019

FDC LTD. share price has surged by 7% and its current market price is Rs 189. The BSE HEALTHCARE is up by 0.2%. The top gainers in the BSE HEALTHCARE Index is FDC LTD. (up 6.7%). The top losers are GSK PHARMA (down 0.1%) and GLENMARK PHARMA (down 0.1%).

NARAYANA HRUDAYALAYA LTD Plunges by 6%; BSE HEALTHCARE Index Up 0.2% (Market Updates)

May 22, 2019 | Updated on May 22, 2019

NARAYANA HRUDAYALAYA LTD share price has plunged by 6% and its current market price is Rs 200. The BSE HEALTHCARE is up by 0.2%. The top gainers in the BSE HEALTHCARE Index are FDC LTD. (up 6.7%) and J.B.CHEMICALS (up 3.4%). The top losers are NARAYANA HRUDAYALAYA LTD (down 5.7%) and JUBILANT LIFE SCIENCES (down 5.2%).

More Views on News

Most Popular

3 Indian Stocks Replicating Amazon's Successful Strategy(The 5 Minute Wrapup)

May 10, 2019

The one critical element that has made Amazon a force to reckon with...

My Top 7 Stocks to Profit from Sensex 100,000(The 5 Minute Wrapup)

May 16, 2019

Tanushree Banerjee explains everything you need to know about the Rebirth of India and Sensex 100,000.

3 Stocks to Bet on to Become a 'Dividend Millionaire'(Profit Hunter)

May 14, 2019

As markets continue to rattle amid earning season, upcoming elections, volatile crude price and US China trade war, it's a great idea to add some stability to your portfolio by adding dividend stocks.

A Simple Checklist for Picking Great Dividend Stocks(Profit Hunter)

May 9, 2019

A filtered, neat list of high-dividend stocks with all this dirty work already done for you.

The Bitter Pill that Will Lay the Foundation for Sensex 100,000(The 5 Minute Wrapup)

May 14, 2019

These companies will help the Sensex more than double from current levels.

More

Get the Indian Stock Market's
Most Profitable Ideas

How To Beat Sensex Guide 2019
Get our special report, How to Beat Sensex Nearly 3X Now!
We will never sell or rent your email id.
Please read our Terms

S&P BSE HEALTHCARE


May 22, 2019 (Close)

S&P BSE HEALTHCARE 5-YR ANALYSIS

COMPARE COMPANY

MARKET STATS