Do­mes­tic pharma mkt grows 11.5% in Jul-Sept

Higher Vol­umes, Price Help Biz Ex­pan­sion

The Times of India (New Delhi edition) - - Times Business - Ru­pali.Mukher­jee @times­group.com

Mum­bai: The or­gan­ised do­mes­tic pharma mar­ket grew in dou­ble dig­its last month, re­sult­ing in one of the best quar­ters in over a year, with 11.5% growth across July-Septem­ber, buoyed by higher vol­umes (3.2%) and price growth (5.5%). The ro­bust mon­soon seems to have helped in re­viv­ing growth dur­ing the quar­ter ended Septem­ber, with all key ther­a­pies ex­hibit­ing dou­ble-digit ex­pan­sion, data from pharma re­search firm AIOCD Awacs showed. Ear­lier this year, the mar­ket seemed to be slow­ing down with the pre­vi­ous six quar­ters regis­ter­ing muted sin­gle-digit growth, pulled down by mul­ti­ple fac­tors in­clud­ing in­crease in use of low-cost gener­ics, and lower sales in acute seg­ment.

Sig­nif­i­cantly, reg­u­la­tory hur­dles im­pacted the sec­tor as ma­jor com­pa­nies re­ceived warn­ing let­ters, flag­ging man­u­fac­tur­ing con­cerns. The US Food and Drug Ad­min­is­tra­tion (USFDA) is­sued ob­ser­va­tions to com­pa­nies like Ci­pla (for Goa, Ben­galuru API), Lupin (Tara­pur, Man­dideep), Bio­con (Ben­galuru, Malaysia), Tor­rent Pharma (Da­hej) and Dr Reddy’s (Bol­laram API, Duvvada).

“These ac­tions con­tin­ued to erode pharma val­u­a­tions: Lupin cor­rected about 20% year-to-date (YTD), fol­low­ing an official ac­tion ini­ti­ated at Som­er­set, and a warn­ing let­ter at Man­dideep; Ci­pla slid 30% YTD, fol­low­ing ob­ser­va­tions at Ben­galuru API and Goa; and Bio­con is down 35% YTD, fol­low­ing ob­ser­va­tions at Ben­galuru and Malaysia,” a note from Edel­weiss Re­search dated Oc­to­ber 7 said.

Fur­ther, the USFDA is­sued a warn­ing let­ter to Glen­mark Pharma for its man­u­fac­tur­ing plant in Baddi (Hi­machal Pradesh), and flagged con­cerns at Aurobindo’s fa­cil­ity in Te­lan­gana re­cently. An­a­lysts say, go­ing for­ward, there could be an im­pact on val­u­a­tions of cer­tain com­pa­nies due to ris­ing reg­u­la­tory risk.

Do­mes­tic sales are likely to grow about 8% year-on-year (YoY) driven by acute ther­a­pies as a heavy rainy sea­son led to a surge in vec­tor-borne dis­eases. The mar­ket reg­is­tered a ro­bust dou­ble-digit growth of 11.9% for Septem­ber 2019, while for the cor­re­spond­ing month in the pre­vi­ous year it was 7.5%, and in Au­gust 2019 the mar­ket grew 9.4%. Acute ther­apy, which ac­counts for nearly half of the mar­ket, reg­is­tered 11.7% growth, while chronic (31% of the mar­ket) grew by 13%, and sub-chronic by 10.7%. Sales of anti-in­fec­tives grew 10.9%, gas­tro In­testi­nal 12.1%, vi­ta­mins & min­er­als 11.4%, and pain/anal­gesics at 12.6%.

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