Thursday, 13 August 2015

Lupin pharmaceutical firm opens research center in Broward

A pharmaceutical firm from India opened a $13 million facility in Coral Springs, where it plans to create 45 jobs.

 
Mumbai, India-based Pharma Major Lupin received a $315,000 public incentive package in a deal with local officials and the state after working with the Greater Fort Lauderdale Alliance, the Florida Department of Economic Opportunity and Enterprise Florida. The company will conduct research and development work in Coral Springs for inhalation products to treat asthma, allergic rhinitis and chronic obstructive pulmonary diseases.

“We are delighted to be making our mark in South Florida,” Lupin CEO Vinita Gupta said. “With the talent and resources this state provides, our Coral Springs expansion will further strengthen our ability to bring quality, affordable pharmaceuticals to patients in the United States and other key markets globally. The new inhalation research and development facility is a significant step forward in our journey to emerge as a global specialty pharmaceutical player.”
Lupin is the sixth-largest generic drug manufacturer in the U.S. mart, according to IMS Health. It’s U.S. headquarters is in Baltimore. It has a pending deal to acquire New Jersey-based Gavis.
 

Wednesday, 12 August 2015

Sun Pharma Q1 profit tanks 46% on Ranbaxy integration cost


Revenue met expectations, growing 10 percent to Rs 6,767.6 crore in June quarter compared to Rs 6,157 crore in March quarter.


Drug major Sun Pharmaceutical Industries  ' first quarter consolidated net profit disappointed street on Tuesday, down 46 percent quarter-on-quarter (down 60.2 percent year-on-year) to Rs 479 crore. The bottomline was impacted by exceptional loss, higher tax expenses and lower other income.
Revenue met expectations, growing 10 percent (up 6.7 percent on yearly basis) to Rs 6,767.6 crore in June quarter compared to Rs 6,157 crore in March quarter. Profit was estimated at Rs 894 crore on revenue of Rs 6,262 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18. Sun Pharma said net profit for the quarter was adversely impacted by one-time items related to restructuring as well as exceptional charges of Rs 685 crore. These exceptional charges related to impairment of fixed assets and goodwill and other related costs and have arisen on account of Ranbaxy integration and optimisation measures, it added. In fact, the country's largest drug maker already issued profit warning (on July 20), saying FY16 revenue will remain flat or record marginal decline compared to FY15. Hence, profit may also be adversely impacted due to certain expenses/charges arising out of Ranbaxy integration as well as remedial actions, it added.
In fact, the country's largest drug maker already issued profit warning (on July 20), saying FY16 revenue will remain flat or record marginal decline compared to FY15. Hence, profit may also be adversely impacted due to certain expenses/charges arising out of Ranbaxy integration as well as remedial actions, it added. Branded generic sales in India (which contributes 27 percent to total sales) increased by 11 percent year-on-year to Rs 1,784 crore.
However, US finished dosage sales fell 4 percent to USD 488 million, impacted primarily due to competitive pressure on some products and temporary supply constraints arising from remediation efforts at the Halol facility. Its US subsidiary Taro Pharma registered a 125.2 percent growth in net profit at USD 103.6 million and a 65 percent growth in revenue at USD 215 million year-on-year. However, its sales volume declined 10 percent as a result of increase in competitor activity in the US. "We remain cautious of the ever-increasing pressure on business from strong competition and the continuing industry and customer consolidations," said Kal Sundaram, Taro’s CEO on August 7. Sun's emerging markets sales dropped 15 percent on yearly basis to USD 133 million due to volatile currency movements in certain emerging markets and a strategic decision of not participating in low margin businesses. Rest of World sales declined 7 percent to USD 91 million year-on-year. Research and development investments stood at Rs 511 crore for the quarter, an increase of 37 percent over Q1 last year. This included significant investments on account of funding the clinical development of MK-3222, the IL-23 monoclonal anti-body in-licensed from MSD (US), said Sun.
Other income fell 72.4 percent to Rs 105.4 crore from Rs 382.5 crore on sequential basis. Consolidated tax expenses for the quarter were Rs 226.8 crore against tax write-back of Rs Rs 600 crore in previous quarter.
"After the management's guidance [that its revenues would be flat for the year], the focus is on EBITDA, which is good," Sarabjit Kaur-Nangra of Angel Broking told CNBC-TV18. "But the numbers on the top line are better than our expectations."
Operational performance was ahead of expectations. Consolidated operating profit (earnings before interest, tax, depreciation and amortisation) shot up 108.4 percent sequentially (down 4 percent year-on-year) to Rs 1,859.7 crore and margin expanded by 1300 basis points (down 310 bps year-on-year) to 27.5 percent in June quarter. Analysts were expecting operating profit at Rs 1,504 crore and margin at 24 percent for the quarter.

Friday, 7 August 2015

What Indian pharma research must learn from Sun Pharma's Glaucoma drug experience

Glaucoma is a health condition that affects the eye. It needs urgent attention and lifelong care. Left unattended, glaucoma can lead to loss of eyesight. There are no known early symptoms and the best solution is for people over 40 years to have regular eye checkups, though glaucoma could, in some rare cases, affect children too.


According to Glaucoma Society of India, Glaucoma is the third leading cause of blindness in India - 12 million people are affected accounting for 12.8 per cent of the country's blindness.
It is a global problem. In the US, for instance, Glaucoma prevalence is reported at 1.9 per cent of the US population aged 40 or older. That means roughly 2.7 million Americans have Glaucoma.
Such patients have to be put on a dose of eye drops for life much like lifelong medication for patients of diabetes or hypertension. However, most of these eye drops tend to have side effects or other associated problems. This is because most such drops contain a preservative called Benzalkonium Chloride (BAK in quickspeak). Over time, BAK tends to prove harmful to the eye surface. In many cases, it leads to redness in the eye with symptoms like tearing, burning or itching making patients uncomfortable.
Therefore, the trend globally today is to move towards eye drops that are BAK-free. From India, Sun Pharma Advanced Research Company or SPARC has come up with a differentiated product - it is not a generic since SPARC has developed a new technology platform that avoids the use of BAK and has undertaken clinical studies in the US for this.
It has launched a product based on this in India called Letoprost RT. However, it is facing challenges in getting the approval to launch a similar product, Xelpros, in the US market. Fortunately, as one gathers from company statements, these are not about some fundamental issues like the need for new or additional clinical data.
Between December last and August this year, SPARC received two Complete Response Letters or CRLs from the US Food and Drug Administration (USFDA), which in effect means the product application cannot be approved in its current form.
When on December 1, 2014, SPARC announced that the FDA had issued a CRL to its New Drug Application (NDA) for Xelpros, it said: "While the FDA did not seek any additional information for supporting clinical data, it sought additional information on certain labelling and other deficiencies for processing the NDA."
Again on August 1, 2015, it informed the bourses that it had received another CRL to its NDA for Xelpros. What is important, it said, "SPARC submitted a response to an earlier CRL it had received from the USFDA, wherein no additional preclinical or clinical data was required. While the USFDA has accepted the clarifications and changes to the labelling, SPARC has now received another CRL from the USFDA seeking minor changes to the proposed labelling. SPARC hopes to address these requirements soon."
First learning: It is very likely that one is not able to clearly understand what the regulator wants, and that becomes a challenge in itself. Says Anil Raghavan, CEO (R&D) at SPARC: "FDA identifies deficiencies in NDA applications and responds in the form of Complete Response Letters (CRL). The response to a CRL is based on best understanding and interpretation of the queries / comments contained in the CRL. However, FDA has the final say in determining whether a response is adequately addressing queries/comments in a CRL." It is important that Indian pharma companies doing research and seeking product approvals abroad understand this well.
Second learning: having an identical product launched in India gives you no advantage. According to SPARC, Xelpros, the product for which it is seeking approval from the USFDA is no different from Letoprost RT that it has in the Indian market. In other words, having a product in India (despite all the good reasons for a Make-in-India pitch) does not seem to be give any comparative advantage to a company planning to launch a product abroad. And it all just boils down to following the existing norm where every country has to anyway approve each product individually.
Third learning and perhaps a very important one for Indian pharma companies from the SPARC experience is with the manufacturing process that a new R&D product has to fall back on. If we are found wanting in this, even a great product development process will not help. Consider this: In the latest CRL that SPARC got from the FDA. Since the product is to be manufactured at Sun Pharma's Halol facility in Gujarat, SPARC says: "The USFDA has indicated that a satisfactory resolution of the cGMP deficiencies at this facility is a prerequisite for the final approval of Xelpros." The USFDA had observed certain cGMP deviations at this facility of Sun Pharma during the inspection conducted by the regulator in September last year.
On the connect between Sun Pharma and SPARC on this, as many would know, in June this year SPARC licensed out XelprosTM (Latanoprost BAK-free eye drops) to a subsidiary of Sun Pharma for the US market. In addition to up-front payment of $3 million, SPARC will receive certain other milestone payments, both totalling to $16 million from Sun Pharma. It is also eligible for certain defined royalties and additional milestone payments linked to the actual sales of Xelpros


Thursday, 30 July 2015

Sun Pharma may file new drug application with USFDA



India's largest drugmaker Sun Pharma  may file application for a new drug with the US Food and Drug Administration in next two to three years, the company's Managing Director Dilip Shanghvi said on Thursday. The firm's research arm SPARC (Sun Pharma Advanced Research Company) is currently working on three new drugs that are currently under clinical trial stage, he added. 

"A few years back, we decided to separate our innovative business in a company called SPARC. That company has now three products undergoing clinical trials. "And hopefully in the next two to three years, we should have our own new product registered in the US," Shanghvi said in his address at Indian School of Business. 


He, however, did not elaborate on the therapeutic areas on which those three chemical entities are under research. The company has around 1,800 research scientists working in multiple R&D centres with expertise in developing generics, difficult to make technology intensive products, Active Pharmaceutical Ingredients (APIs), Novel Drug Delivery Systems (NDDS) and New Chemical Entities (NCEs), according to SPARC's website. The company had earlier said it spends about 6 percent of its revenues on Research and Development. 

Saturday, 25 July 2015

JPMorgan to fund Lupin’s $880-million Gavis deal

PMorgan will bankroll Lupin for its $880 million acquisition of Gavis, a New Jersey-based generic drug firm.
The Wall Street bank will act as guarantor till the date of payment, which is some weeks away, and then lend the full deal amount that Lupin will have to repay over a medium term period, said a person who is aware of the transaction
The loan, it's understood, is not backed by hard collateral or claims on future cashflow, but based on pure credit assessment. "Lupin will have enough time to arrange funds to pay off the loan...JP is not holding a gun to their head," said a source.
The acquisition financing arrangement was cobbled together after the seller insisted on a guarantee.
A spokesperson for JP Morgan India declined to comment on the deal while ET's email to a Lupin spokesperson went unanswered till the time of going to press.
On Thursday, Lupin, a Mumbai-based pharmaceutical company, announced that it would take over Gavis, which is run by Veerappan Subramanian.
It would be the biggest outbound transaction in the Indian pharmaceutical industry.
JP Morgan is also the sell side advisor in the deal. "What's unusual is the absence of other bankers and JP writing the cheque for the entire amount which is not small," said a seniior banker.
Two industry sources said that Lupin had placed the bid for Gavis and another UKbased drug firm specializing mainly in dermatological brands, which was also valued at $700-900 million.
Earlier in the year, Lupin's name had cropped up as a bidder for Kremers, the US generic drugs business of Belgian drug firm UCB.
Analysts are divided on the Gavis deal. Being valued at 9 times 2014 sales and 6 times 2015 sales, some feel it's an expensive acquisition.
Indeed, one Mumbai-based investment expert said the deal does not give comfort on the payback time, especially due to a lack of clarity on the potential upsides from the launch pipeline of Gavis. However, another analyst thinks Lupin that has paid full price for a good asset in contrast to some generic peers who typically acquire assets at distress value. "If the margins are sustained at 35% to 40%, we see Gavis to give the right push to Lupin," he said requesting anonymity.
Lupin itself has been a conservative buyer and has not paid a very heavy price for any of its global deals.
On the Gavis deal, Lupin said that it hoped to leverage on at least 50 of the 66 future filings of Gavis to treble revenues by 2017-18. On Friday at the BSE, Lupin stock ended down 3% at Rs 1672.

Lupin acquires specialty portfolio from German company

Temmler Pharma has a specialty portfolio of 13 products including key Central Nervous System (CNS) products

A day after announcing a $880-million acquisition in the US, drug maker Lupin said it will acquire speciality product portfolio from German company for an undisclosed amount.

Chief executive Vinita Gupta said Temmler’s business had a “strong strategic fit with Lupin’s Hormosan business in Germany and enables Lupin to bring an enhanced specialty central nervous system (CNS) portfolio to the German market.” Established in 1917, Temmler is a part of Aenova Group, a pharmaceutical contract manufacturer. Hormosan, also a German pharmaceutical company, was acquired by Lupin in 2008.
Based in Marburg, Germany, Temmler has a specialty portfolio of 13 products including key products and specialty products that address rare disease areas like myasthenia gravis, huntington’s disease as well as fast-growing dermatology products for anti-wart treatment.

The announcement came after the close of business hours at the stock exchanges. On Friday, Lupin stock closed at Rs 1,672, down 3.27 per cent from the previous day’s close. This is the second consecutive day of decline in the stock price. On Thursday, the stock lost over five per cent after it announced a 16 per cent drop in consolidated net profit for the June quarter. The Mumbai-headquartered drug maker has lost Rs 6,844 crore of market value between Thursday and Friday owing to a drop of over eight per cent in stock price.

Earlier this week, the country’s biggest pharma company, Sun, lost over Rs 34,000 crore of market value in a day after the company said its profit will be ‘adversely impacted’ due to expenses related to integration with Ranbaxy, a company it acquired last year.     

This is Lupin’s sixth acquisition in 18 months. In February 2014, it had acquired Netherlands-based Nanomi.

A month later, it acquired control of Mexican company Grin. In May, it bought Brazilian company Medquimica Industria Farmaceutica. Earlier this month, Lupin acquired ZAO Bio Biocom in Russia. On Thursday, it announced acquisition of New Jersey-based generic drugs firm GAVIS for $880 million. GAVIS is the largest overseas acquisition 

Friday, 24 July 2015

What took mighty Lupin down!

In an interview to CNBC-TV18, Praful Bohra, VP- Research, Religare said that US business is one of the most profitable markets for Lupin, and seeing a decline there has resulted into overall weak numbers. 

Besides, absence of big bang approvals and Aurobindo Pharmax entry into generic Suprax also impacted Lupin sales, he said. He also feels the price Lupin paid to acquire Gavis is too high. 

Below is the transcript of Praful Bohra's interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18. 

Sonia: How to approach Lupin  ? 

A: The numbers were weak. On the operating front - that's largely led by the sequential decline in the US business. However, some part of it would also be driven by the entry of Aurobindo Pharma  in Suprax; I think that would have led to some sequential decline. Having said that I also believe that there would be some erosion in the base business because there were no big bang approvals for Lupin in the last quarter. The US business is one of the most profitable markets for Lupin and that seeing a decline the overall numbers are weak. 

Latha: How are you looking at the Gavis acquisition? Is the price right?  

A: First on the acquisition and what it brings to the table. If you look at the portfolio of Gavis, they have a portfolio of control substances products, dermatology products where Lupin is negligibly present as of now, so that way the acquisition fits. The only thing is the price that they are paying; my sense is it is pretty expensive. So they are paying almost 9x the sales. We have seen such kind of valuations in the past only for domestic acquisitions like Ranbaxy and Abbott 's acquisition of Piramal. I think for US geography this is an expensive acquisition, much higher than what the past acquisitions have been in the range of four-five times sales. So price is one thing which I am concerned about but from a strategic perspective initially this can be return on capital employed (RoCe) dilutive in the medium-term for the company. 

It is okay portfolio wise because it fits in the strategy of Lupin but whatever the price they have paid is obnoxious.