Oct 23, 2009, 01.33 PM | Source: CNBC-TV18

Pharma outlook: What's brewing at DRL, Lupin, Pfizer?

Vikas Dandekar, India Bureau Chief, PharmAsiaNews.Com provides his outlook on some the pharmaceutical comapnies.

Vikas Dandekar, India Bureau Chief, PharmAsiaNews.Com

There have been rumors that Dr Reddy's plans a strategic tie up. Commenting on the same, Vikas Dandekar, India Bureau Chief, pharmasianews.com, says an announcement for a tie-up was quite likely.

DRL has given a guidance of about 10% for the year, which Dandekar feels is quite achievable. He added that Fonda Pariniux is likely to be launched in the US soon.

Lupin , Dandekar says, has a basket of opportunities and was currently looking at acquiring different brands in the US.

On Pfizer he says, its merger with Wyeth was coming along well.

Here is a verbatim transcript of the exclusive interview with Vikas Dandekar on CNBC-TV18. Also watch the accompanying video.

Q: Will Dr Reddy’s announce any strategic tie up along with its numbers today?
A: Curiosity has been building up from investors, from bankers and also from the employees. We have not been able to get much about that but there are lot of questions on why this deal cannot happen now; from the impossibilities to in the realm of possibility everyone is saying it looks to be possible. Somebody actual mentioned that its almost certain that some part of the stake will be sold, whether or not that announcement will come today is a question but things look pretty bright on that front.
Q: What are the next few triggers for Dr Reddy’s as you see it from a business point of view?

A: They have given a guidance of about 10% and that looks quite achievable from the current base business. Fondapariniux is something that people are awaiting because they had the approval and Arixtra as the brand is called is a very strong product. Again it’s a GlaxoSmithKline (GSK) product so it’s related to the same company.

Darbepoetin is something that they are working on from biological side. They already have two products in the biologics space Filgrastim and Rituximab and Rituximab is a clone of genetics product which is a very strong product in terms of revenues. So having a pipeline of four biologics as they have mentioned looks to be very strong case. Apart from that there is a lot to be done on the domestics formulations business according to me because most of the companies  have been growing at 15-16% whereas because of change in some kind of supply change arrangement, Dr Reddy’s has not been able to match the industry average so there will be some  growth coming from there.

Apart from that, the GSK rollout will also happen in countries like Latin America and Africa. Suddenly these markets are also becoming very important. These are the ones which will actually be seen very closely so far as Reddy’s earnings are concerned.

Q: There was a pall of gloom over what The US Food and Drug Administration (USFDA) was doing to many large Indian companies even till last quarter – some people believe that that pressure is easing a little bit with recent communications to Lupin and Ranbaxy- anything that you sense that the pressure is off for the moment or do things remain as uncertain as before?
A: I think the signals have been very positive. FDA like any regulator continues to be a very slow organization in terms of what it wants to do and it cannot be put in terms of timelines when it will all get resolved. But from interactions with the managements with both the companies Ranbaxy and Lupin, I think they had some very good productive meetings with the FDA inspectors. No time lines can be given so far as Devas is concerned. I think they are all prepared and waiting to go in for that particular company. Lupin has been given everything that was needed by the FDA, so it’s a matter of time but that time is something that is a crucial point. So we don’t know when all that will happen but that can be seen as a positive trigger

Q: On which one does there seem to be a favourable resolution likely though because on Lupin most people always believed it was just a matter of minutiae that would get cleared up and Lupin did not have that much to worry about    whereas for Ranbaxy its been an overhang for many quarters now the Paonta Sahib situation?
A: Its very critical because Suprax believes comes out from that same plant and that is the springboard for Lupin’s presence in the US whatever it has been doing from acquiring the more recent Antara deal it will be very important for them to get the clearance and it’s a very awkward feeling to have a FDA scrutiny going where you have so many brand issues going in that extremely conscious market. Mandideep has been an headache for the company for 4-5 years so Atul Sobti told me that Daiichi wants to look at this company for two decades not for 2-3 years , so the entire team has been working about on this solution and possibly there will be some kind of hope there maybe in couple of months to come.


Dr Reddys Labs stock price

On November 26, 2015, Dr Reddys Laboratories closed at Rs 3110.35, down Rs 278.25, or 8.21 percent. The 52-week high of the share was Rs 4382.95 and the 52-week low was Rs 3010.00.

The company's trailing 12-month (TTM) EPS was at Rs 103.55 per share as per the quarter ended September 2015. The stock's price-to-earnings (P/E) ratio was 30.04. The latest book value of the company is Rs 623.38 per share. At current value, the price-to-book value of the company is 4.99.

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