Is It Time For Indian Drugmakers To Look Beyond Generics?
Indian drugmakers plan to focus more on specialty products and set up new facilities even as they expect intense competition and pricing pressures to continue to hurt their profitability.
That's also after the pharmaceutical companies had a rough ride in the just concluded year. The NSE Nifty Pharma Index dropped 10 percent in the past 12 months compared with nearly 2 percent gain in the NSE Nifty 50 Index, according to Bloomberg data. Drugmakers like Sun Pharmaceutical Industries Ltd. and Cadila Healthcare Ltd. tumbled over 25 percent each during the period.
“In generic vanilla drugs, there is no pipeline coming after 2023. Big pharmaceutical companies have moved to biomolecules and biosimilars,” said Amit Rajan, managing director at Prosfora Technologies Pvt. Ltd. “Indian drugmakers into pure generics space will definitely see their numbers going down.”
BloombergQuint spoke to Deepak Malik, senior analyst at Edelweiss Financial Services, that tracks the pharma space, and Amit Rajan of Prosfora Technologies, that works on good manufacturing practices for drugmakers, to understand what lies ahead for pharma companies.
Here are the key highlights from the conversation:
- More than 60 percent of $100 billion worth of patents that will expire in next five years will be in complex drugs space.
- Revenue for pharmaceutical companies for past two quarters have been stable with arrested price erosion.
- China disruption and outsourcing will continue to benefit Divis Laboratories Ltd.
- Edelweiss recommends Dr. Reddy's Laboratories Ltd. as best play on the complex drugs.
- Indian companies expected to invest significantly in the biosimilars space as it benefits only first-movers.
- Recent acquisitions done through Zydus Wellness is an overhang on Cadila Healthcare's share price.
- Torrent Pharmaceuticals Ltd. has a good opportunity to grow with European acquisitions.
- Jubilant Life Sciences Ltd. has a good potential with their active pharmaceutical ingredient capability.
- Sun Pharma has a strong pipeline and strong investment in specialty drugs arena. Next few years could be challenging as the specialty drugs pipeline reaping benefit would take time.
- Wockhardt Ltd.'s plant clearance will take time due to trust gap with U.S. FDA.
- Don't see any U.S. FDA issues for major Indian pharmaceutical companies in 2019.
Watch the full conversation here:
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