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Global Pharmaceutical & Biotechnology Outlook 2013

by anonymous

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India pharma rode on the wave of bunched up patent expiries in the US with many Para IV launches in 2012. In addition, it also benefited from the continuing high teen growth of Indian pharma market. With patent expiries in the US dwindling from $30b in 2012 to $10b in 2013 (small molecules), Indian generic companies will now need to focus on complex generics that offer sustainability of earnings. Locally acting drugs and targeted drug delivery products make up for the bulk of complex formulation generics. We have analyzed this space and have provided a fairly comprehensive list of products falling under these categories indicating that topical drugs remains the most near term opportunity for generics. Inhalers offer the most lucrative opportunity, though not before 2016.

Our growth outlook on Indian market continues to remain optimistic with 15-18% growth. This is based on the silent reforms in India that started with implementation of a strict GMP (Good Manufacturing Practices) in 2005, continued with implementation of GLP (Good Laboratories Practices) in 2011 and now the bar coding norms at primary and secondary levels. All these continue to put pressure on the very small manufacturer ultimately leading to industry consolidation – something that augurs well for world’s most fragmented pharma market. We do not see any negative impact due to the newly announced National Pharma Pricing Policy (NPPP) due to its emphasis on market price based pricing policy.

Our top pick remains Sun Pharma as it remains the best positioned to tide over the patent cliff with its latest acquisitions, DUSA and URL Pharma. A strong balance sheet further allows it to acquire more such high value targets. We also recommend Natco Pharma for its focus on complex generics like Copaxone, Revlimid and Tamiflu. Besides this, its domestic market strategy targeted at gaining Compulsory License on high value oncology products too remains lucrative.

Key Topics Covered

Complex Formulations – Scope and Opportunity in US market
Liposomal Drugs: Opportunities for Generic Companies
Colon Targeted Drugs: Opportunities for Generic Companies
Transdermal Drugs: Opportunities for Generic Companies
Topical Dermatological Drugs: Opportunities for Generic Companies
Inhalers: Opportunities for Generic Companies
Reforms and Consolidation Continues in Domestic Market
New Pharma Pricing Policy – Neutral to Positive for the Industry
IPCA: Momentum Continues
Natco: Entering the Big League Through Multi Pronged Strategy
Sun Pharma: Balance Sheet Leveraging at Play
Aurobindo: Still Not Out of the Woods
Dishman: Management Accepts The Limitations of Pure Play Crams
Biocon: Expenses More Visible than Growth Drivers
Cadila Healthcare: In a Phase of Consolidation
Cipla: Weakness in Regulated Markets Persists

I. India Pharma: Complex Formulations - The Next Leap Forward
Complex Generics – Life after the Patent Cliff
Complex Generics – Scope and Opportunity
Opportunities in Formulation Expertise

II. Targeted and Locally Acting Drugs: Opportunities for Generic
Liposomal Drugs
Colon Targeted Drugs
Transdermal Drugs
Topical Dermatological Drugs

III. Domestic Formulations: Reforms and Consolidation Continue
GMP Norms in 2005 Helped Consolidation
Good Laboratory Practices - Introduced from 1 Nov 2010
GMP + GLP = Growth of Big Firms At the Cost of SMEs
Bar Coding on Packaging – Improves India’s Image But At a Cost

IV. New Pharma Pricing Policy: Neutral to Positive for the Industry

India Pharma – Company Analysis
1. IPCA: Momentum Continues
Anti Malarial Tender Business – Continues to Drive Growth
US Generics – Temporary Delay at Indore SEZ
Domestic Formulations – Growth on Track
Margins – Limited Scope of Improvement

2. Natco Pharma: Entering the Big League Through Multi Pronged
Domestic Formulations - Onco Focused Portfolio
Venezuela – Potential Oncology Market for Natco
Para IV Opportunities– A Free Call Option

3. Sun Pharma: Balance Sheet Leveraging at Play
DUSA Acquisition – Targeting High Value
Acquisition of Taro’s Minority Stake – The Offer Might be Revised Further
US Formulations – Growth Continues
Domestic Pharma – Underlying Healthy Growth

4. Aurobindo: Still Not Out of the Woods
US formulations – Growth led by New Launches and Forex
Product Filing details
ARV formulations – Modest Outlook
Margins Improvement led by High US Formulations
Debt – Continues to Remain High

For more information kindly visit :

Global Pharmaceutical & Biotechnology Outlook 2013: India Pharma


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