MOSL: AUROBINDO PHARMA (Buy)-Launch of niche product bodes well for near-term growth
​Aurobindo Pharma: Launch of niche product bodes well for near-term growth; Key catalysts in place to drive medium-term earnings too
(ARBP IN, Mkt Cap USD6.1b, CMP INR767, TP INR850, 11% Upside, Buy)
- Receives approval for Renvela in US: ARBP has received final USFDA approval to manufacture sevelamer carbonate tablet 800mg (brand name – Renvela; innovator – Genzyme) in the US. Notably, ARBP is the first generic player to receive approval for Renvela, which is indicated for the control of serum phosphorus in patients with chronic kidney disease on dialysis.
- Only player in the USD800m market: According to the IMS, the estimated market size of this product is USD1.9b for the 12 months ended May 2017. Primary sales booked by the innovator for Renvela/Renagel stood at ~USD1b (estimated market for Renvela expected to be ~USD800m) in CY16. ARBP has already received approval for sevelamer carbonate oral suspension from the US FDA in June-17 (IMS estimates market size of USD140m).
- Limited-competition product: Although there are at least eight generic filers for Renvela (ARBP, Cipla, Mylan, Sandoz, DRRD, Lupin, Impax and Glenmark), only ARBP has received approval by now. ARBP was one of the late filers for this product, but since most other players have received CRLs (due to complexity at API level), Renvela may remain a limited-competition product in near term. Impax expects to launch the product by late 2017/early 2018, while Cipla guides for launch by 3QFY18. LPC/GNP may not be able to launch in FY18.
Aurobindo Pharma is a vertically integrated pharmaceutical group based in India. Co. maintains a product portfolio spread over major product areas encompassing CVS, CNS, Anti-Retroviral, Antibiotics, Gastroenterologicals, Anti-Diabetics and Anti-Allergic with approved manufacturing facilities by USFDA, UKMHRA, WHO, MCC-SA, ANVISA-Brazil for both APIs & Formulations. In addition to Semi-Synthetic Penicillins, Co. has a presence in key therapeutic segments such as neurosciences, cardiovascular, anti-retrovirals, anti-diabetics, gastroenterology and cephalosporins, among others. Co. exports to over 125 countries across the globe.
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