Brokerages say the sequential decline was due to the flattish market share trajectory of oncology biosimilars (Pegfilgrastim, Trastuzumab) in the American market, with volumes continuing to trend below the pre-Covid levels and price decline in double digits. Further, the market share ramp-up in Insulin Glargine (for diabetes) has been muted; the company has about 2 per cent share in the US Insulin Glargine market.
Analysts at Nirmal Bang Research say: “We see the US biosimilars space witnessing similar competitive intensity as small molecule generics, leading to opportunity size for biosimilars launches maturing in a year or two. In addition, unlike small-molecule generics, local US-based players are dominating the market.”
Growth in the generics segment, too, was muted -- 3 per cent both on sequential and year-ago bases given pricing pressure, as well as lack of fresh launches. Analysts expect the segment to grow in mid-to-high single digits in FY22, led by double-digit growth in formulation sales (3-5 launches in the US market) and expansion in emerging markets. The active pharma ingredient segment within generics — which accounts for 80 per cent of the sales — is expected to record flat to lower single-digit growth due to capacity constraints.
The research services unit (Syngene) reported steady revenue growth at 9 per cent, led by discovery services/dedicated centre services. Analysts expect growth in this segment to be around 19 per cent over FY21-23.
Given the slow ramp-up of biosimilars products, most brokerages have cut their FY22/FY23 earnings estimates by 10-15 per cent. Analysts at IIFL Research expect the earnings downgrade cycle to continue over the next two-three quarters until business visibility in this segment improves.
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