Dr Reddy’s pain may bring gains for Torrent & Cipla
By Jwalit Vyas, ET Bureau | 2 Dec, 2015, 02.03AM IST
ET Intelligence Group: In a weird twist in the pharma land, Dr Reddy’s Laboratories’ loss due to the delayed launch of a generic drug may in fact benefit the investors of Torrent Pharmaceuticals and Cipla in the short term. The drug in focus is the generic version of Nexium, a heartburn pill, which has earned over $5.5 billion for the owner AstraZeneca so far.
Dr Reddy’s pain may bring gains for Torrent & Cipla Torrent Pharma got an approval to sell the drug’s generic version last month. Cipla, too, will benefit since it is supplying ingredients to Teva, another foreign pharma company, which is selling the generic version.
Dr Reddy’s launched Nexium’s generic version in September end. The move was immediately challenged by AstraZeneca because Dr Reddy’s version came in purple, which was starkly similar to the patented drug. This resulted in a temporary restraining order on Dr Reddy’s Lab.
Recent appeal by Dr Reddy’s has also been turned down last week by the Delaware Federal judge. Some analysts believe that the recent observations at Dr Reddy’s plants would need a side transfer which could further delay the re-launch of Nexium. A side transfer is manufacturing the drug at some other plant and may need plant approvals by the USFDA. The benefit to other pharma players may not be necessarily in market share gain. “The operating margins of such drugs are around 80% and a new entrant can really create price erosion,” said Nimish Mehta of Research Delta Advisors, a pharma focussed research firm.
According to the US healthcare information provider IMS Health, Nexium’s branded and generic sales put together amounted to around $5.2 billion or `35,000 crore in the end of July.
| Subscribe To Our Free Newsletter |
