gEntecavir is Aurobindo Pharma (ARBN’s) 15th approval in FY16. If this pace continues, revenues could ramp up meaningfully over the next few years. We remain comfortable with our above-consensus estimates and maintain ARBN as our top pick.
After a light FY15, ARBN has received 15 approvals in FY16 YTD. This is a mix of plain-vanilla and limited competition products. While some are small, they add to ARBN’s positioning as a one-stop shop across categories.
This works in its favour in the current “channel consolidation” environment, as customers rationalise vendor lists.
ARBN has been a key beneficiary over the last two years and we expect this to continue.
While new approvals help everyone, we believe ARBN faces the least risk to its base biz, as it has a large number of small to medium-sized products and no pockets of supernormal pricing. The pipeline is strong (180+ pending ANDAs) and improving. Also, 85%+ of pending ANDAs are from sites that were successfully inspected recently.
ARBN makes up 26% of the total ANDA approval count for Indian companies in FY16.
We expect gEntecavir (US$285m market) to be a potentially chunky & sustainable product for Aurobindo.
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