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The Equitymaster Research Digest

Megatrend signals from a recent trip, what to look for in 2Q results and more...
Oct 13, 2015

Unless you are like my colleague Bhavita (our in-house pharma analyst), having an outlook on pharma sector stocks can be quite a challenge. Unlike her, for investors who do not understand pharma terms and have no clue about drug pipelines, market size etc, the sector is a complex maze. Even attending a basic quarterly result conference call with the management will throw at you half a dozen jargons. And unless you have good grip over the history of para IV filings, your estimates of the company's EPS has a fair chance of going horribly wrong!

My previous discussions with management of pharma companies have been peppered with terms like these...

ANDAs (Abbreviated new drug applications)

NCEs (New Chemical entities - a new drug)

Para IV filings (notice filed by a generic pharma company challenging the patent)

NDDS (New drug delivery system - a new method to administer the drug)

DMF - Drug master file

API - Active pharmaceutical ingredients (bulk drugs - raw material for most pharma entities)

ODT - Orally disintegrating tablets

483s (USFDA's observations regarding the company's manufacturing plant)

I had little reason to expect anything different this time. My guess was that as usual it would be some updates and numbers on such jargons. Needless to say, I prepared myself well.

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