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MOSL: HEALTHCARE-US generics – on a marginal recovery path; Filing rate slightly better than leakage rate

Healthcare: US generics – on a marginal recovery path; Filing rate slightly better than leakage rate

 

• Companies focusing on US generics have been facing pressure in their base portfolio. Against this backdrop, we attempt to carefully assess incremental business from the recent launches (over past nine months) to gauge near-term growth prospects.
• Cipla, Aurobindo Pharma (ARBP) and Glenmark Pharma (GNP) are likely to take major strides in the US business, despite heightened competitive intensity in base portfolio. This is evident from higher sales growth of these companies versus peers in FY19YTD.
• Lupin (LPC) and Dr Reddy’s Lab (DRRD) are expected to add ~USD80m sales from approved and launched products. However, increased pricing pressure in key products and a higher base of FY18 are likely to lead to marginal growth in US sales.
• The pace of approvals is yet to pick up, impacting the sales trends of companies. Sun Pharma (SUNP), too, saw a marginal decline in US sales as pricing pressure continues impacting the company’s base business. We have assumed no change in the bargaining power of pharmacy benefit managers (PBMs) and/or distributors.