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MOSL: HEALTHCARE-Volumes drive IPM growth; prices remain muted

Healthcare: Volumes drive IPM growth; prices remain muted

 

• Indian pharmaceutical market's (IPM) secondary sales increased 9.1% YoY (7.4% led by volume growth and 2.6% by new launches) in 1QFY19.
• Although pharma companies' primary sales are expected to come in strong in 1QFY19 due to a low base, their secondary sales do not reflect the same trend, implying a quarterly lag between primary and secondary sales. Secondary sales growth hitting a trough in 2QFY18 also supports this correlation.
• Pricing (-0.9% in the June quarter) has been under pressure for 12 months now.
• Notably, IPM grew 8.6% YoY in June-18. The growth momentum has largely remained intact since July-17 due to support from volumes and new launches.

 Glenmark, Ajanta and Biocon witness highest YoY growth for the quarter

• Growth for most companies has improved over the past 12-18 months, after taking a hit from weakness in the domestic market post GST implementation.
• Glenmark’s secondary sales grew 19% YoY in 1QFY19, led by a strong performance in the chronic portfolio. Lupin’s secondary sales grew 14.7% YoY, led by strong traction in the anti-diabetes portfolio, especially in the product partnered with Boehringer Ingelheim. Abbott India continued performing well in its established portfolio by growing at 13.9% YoY. Torrent Pharma also exhibited 12.5% YoY growth in secondary sales, led by improved sales of the Losar brand (acquired from Unichem) and Shelcal in the vitamins space. Alkem delivered 12.3% YoY growth, backed by a strong performance in anti-infective products.
• Natco’s secondary sales declined 9.3% YoY in June (led by lower Hep-C sales), followed by Sanofi India (-5.9%, led by lower Combiflam sales). Pfizer (+0.5%, led by lower Dolonex sales), Mankind (+3.6%) and Merck (+7.4%) saw growth in secondary sales, but still underperformed the IPM.