US FDA plant approvals: Positive for Ipca Labs, Cadila

UR Associates has come out with its report on pharma space.

After a long wait, Ipca Laboratories has finally received approval for its Indore facility from the US FDA. This facility along with its Silvassa facility would be now used to manufacture drugs to the US market. Its Silvassa facility was already running at full capacity and the company badly needed this new facility to cater to the huge demand in US market. The company now awaits product approvals from this plant and would look for site transfers from its Silvassa facility. Ipca currently has about 12 products approved and has filed for 24 products with the US FDA. With the approval coming in we can expect the company to start filling ANDAs aggressively and increase its share of revenues from the US market. The Indore facility is expected to contribute to about Rs 750- Rs1,000 million of revenues by FY14 and could be the company’s major manufacturing plant with revenue contribution of Rs 4 billion by 2015-16. 

The US FDA has also revoked the warning letter issued on Cadila Healthcare’s Moraiya plant. The company had earlier received a warning letter from US FDA in July 2011 for non-conformity to current good manufacturing practices (cGMP) and possibility of adulteration of the products manufactured from that facility. Although the warning letter did not hamper the regular business of the company, the plant did not receive any new product approvals post the warning letter. Cadila has filed a number of injectables from this plant and with the approval to the plant we can expect injectables approvals coming soon.

Meanwhile, Dr. Reddy’s announced its Q1FY13 results, which were below expectations mainly because of lower than expected performance in the US market, which was plagued by higher competition and pricing pressures on its existing product portfolio. The company’s domestic business has witnessed a strong revival and posted 19% growth compared to single digit growth figures for last few quarters. Going forward, the new product launches (Lipitor, Toprol XL, Boniva) in the US market should drive the growth in the US market and if the strong domestic and emerging market growth continues, the company would be able to announce better results in the coming quarter.

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Taro Pharma panel turns down Sun Pharma's open offer price: Taro Pharma said that a panel of its board of directors has rejected controlling firm Sun Pharma's offer price for the outstanding shares, as it was not in "the best interests of Taro's minority shareholders". Sun Pharma, which holds about 67% stake in Taro, had made an open offer of $24.50 a share last year for the remaining stake, but Taro's minority shareholders rejected it saying it was inadequate considering the improvement in the company's performance. Sun Pharma has refused to sweeten its offer. The development comes just a day after Taro's minority shareholder, Guardian Point Capital, asked Sun to value Taro's shares at $75-100.

Dr Reddy's Laboratories Q1 PAT up 28% YoY at Rs 3,360 million: Dr Reddy's Labs posted a net profit for the quarter ended June to Rs 3,360 million, up 27.7% YoY from Rs 2,630 million. The net profit was a tad lower than ET Now estimates of Rs 3,660 million. Q1FY13 sales were at Rs 25.4 billion, up 28.4% YoY from Rs 19.78 billion. The ET Now poll expected sales of Rs 25.74 billion. The company reported a forex loss of Rs 210 million for the quarter ended June 2012 against forex gains of Rs 158 million in the year-ago period. Other income for the June quarter stood at Rs 218 million against Rs 187 million in the June 2011 quarter.

Dr Reddy's US revenues expected to dip next year: The Hyderabad-based pharmaceutical company Dr Reddy’s Laboratories Ltd (DRL) is expecting its revenue growth in the US to decline from next year as patent expiries peaked this year. “The US will continue to drive the growth in the current year. However, patent expiries peaked this year and will decrease over the next few years. As a result, growth rates will decline,” G V Prasad, vice-chairman and chief executive officer of DRL, told the annual general meeting. According to the company’s annual report, the year 2012 will have patent expiries worth $ 44 billion (Rs 2.4 lakh crore) in sales in the US, more than double compared to last year. The sales value of the patent expiries due next year is just about $ 15 billion, which will subsequently rise to a maximum level of $ 22 billion in 2015, it said.
 
Piramal Healthcare gets nod for phase-2 trials of cancer drug: Piramal Healthcare has received approval from the Drug Controller General of India to conduct Phase-II clinical trials of the cancer drug, P276, in combination with chemoradiation for head and neck cancer. The prevalence of head and neck cancer in India is amongst the highest in the world. This cancer is common with roughly 1,50,000 to 2,00,000 cases in India identified each year. Phase-I studies were completed in Canada and India. The drug is likely to reach Phase III in early 2013. Dr Swati Piramal, Vice-Chairperson, Piramal Healthcare said, “Severe radiation induced mucositis is a debilitating toxicity of chemoradiation and can limit the treatment dosing and frequency. By developing P276, we hope to provide benefit to patients both clinically, and in terms of a better quality of life.”

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