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G r owt h i n a c u t e t h e r a p i e s , a p l e a s a n t s u r p r i s e…
Indian pharma market witnessed strong growth of 21.5% YoY in
November 2011, which was higher than 13.7% YoY in October 2011, as
per latest All India Organisation of Chemists & Druggists (AIOCD) data.
We saw a sharp recovery in therapies like anti-infectives (17.9%), GI
(24.6%) and gynaecology (18.2%). These therapies were languishing
around single digit growth in the past few months. Extended monsoon
resulted in higher growth in anti-malarials to 20%. Companies like Pfizer
India (31.2%), Ipca Labs (30.2%), Sun Pharma (28.8%), Glenmark Pharma
(28.6%) and GSK Pharma (23.1%) registered robust growth during the
month. For the 12 months ending November 2011, the IPM grew by
14.9% compared to 14.5% in October 2011.
During the period, Ranbaxy launched the much awaited generic version
of Lipitor, the world’s largest selling brand. The mood was, however,
dampened by profit sharing agreement with Teva. Ranbaxy also signed a
consent decree with the USFDA to resolve the pending CGMP issues
with a provision of ~US$500 million.
On the approvals front, Strides once again hogged the limelight with
maximum number of approvals in the consecutive month, thanks to
speedier approvals from the USFDA in injectables category. Other
companies like Glenmark Pharma, Sun Pharma, and Torrent Pharma
received one approval each during the period.
On the R&D front, Glenmark received a setback when Napo Pharma, its
partner in the development of drug for HIV related Diarrhoea terminated
the contract due to lack of regulatory filing. Glenmark was supposed to
launch this product in 140 countries (excluding regulated market) by
2013.
A report published by US Government Accountability Office during the
month gave a detailed account on shortage of drugs in the US market
and issues related to shortage of drugs. The report indicates a 200%
increase in drug shortages between 2006 and 2011.
S e c t o r v i e w
During the month, the healthcare index managed to stay afloat on
account of some defensive buying. Market sentiments remained weak on
account of some really poor macro data, which led to hammering of
frontline stocks. The markets have also started weighing the impact of
currency fluctuation on pharma stocks. Companies like Sun, Divi’s, Cipla,
Biocon, Lupin and Ipca are well placed to reap the benefits of favourable
currency fluctuation on account of nil to very less component of forex
debt. On the other hand, players like Ranbaxy, Jubilant, Aurobindo,
Cadila, Glenmark and Strides will have to make substantial MTM
provisions for restatement of forex debts. Going ahead, we expect forex
to slowly become a major determinant if the pressure on the Indian
rupee persists. The sector, however, is still expected to outperform the
broader market on account of good traction from the US supported by
product approvals, a growing presence in Pharmerging markets and a
strong foothold in India.