Surajit Pal, pharma analyst, Prabhudas Lilladher says the USFDA’s nod to Ranbaxy’s drugs will only aid the company from a sentiment point of view, not in terms of its revenues.
Speaking to CNBC-TV18, Pal said, “The size of the market is roughly around USD 60 million and quite a competitive one. So, I am not expecting a pretty big number as far as revenue is concerned.”
The USFDA today approved Ranbaxy’s drug called Plendil generic, which is used for hypertension. Ranbaxy was expected to be the authorised generic for this particular drug, but it is already genericised and there are already 6-7 players in this market for this particular drug.
Below is the edited transcript of Pal’s interview to CNBC-TV18.
Q: First a quick take on what we have heard with regards to Cipla and Ranbaxy. The revenue opportunities are not very high but especially in the case of Ranbaxy this is an approval that has come after a long time?
A: As far as Ranbaxy is concerned, this is very positive but in a sense it is only sentimental. The size of the market is roughly around USD 60 million and quite a competitive one. So, I am not expecting a pretty big number as far as revenue is concerned.
However, post resolution achieved in Ohm Laboratories, they got it fastened. This also created a lot of value because this is the first normal generic product come out of the company’s approval post 2009.
Q: You said that you expect a pipeline of 20-25 drugs from Ohm Labs, what is the opportunity there?
A: It is too early to talk on that because the company has not given any kind of indications what they would do with 15-16 products. But what they said earlier is that they have around 30 plus products they have filed and which is equally distributed between Mohali and Ohm.
Q: Can you take us through some of the gains that we have seen in other stocks as well? For instance Aurobindo Pharma has been a big gainer over the last couple of trading sessions. What are you seeing or picking up in terms of positive news on that company?
A: Market is pretty late in responding the news which came Friday morning. Cymbalta is a big product, it is around USD 4.8 billion product. The point is, six companies already got approval on the very first day.
I am expecting around 10 companies to be there in first six months. So, at the very first day I believe 90 percent erosion is possible and say by the first quarter we will be seeing 95 percent plus erosion. So, I am not expecting anything big but it is significant for Aurobindo because the size of the revenue is smaller vis-à-vis the peers over there. However, I believe more than the Cymbalta news, it might be some big investors are buying and that us why there is so much of volume has happened.
Q: It is more a deal opportunity that is driving Aurobindo higher?
A: Aurobindo is not a single product. They have multiple products approval plus ingestible which is the core interest in the company which will be continuing for say next 24 months.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
