 "Generic pharma stocks gain on positive outcome")
Stocks of Natco Pharma and Cipla went up 5.4 per cent and 1.2 per cent, respectively, after the Supreme Court rejected Novartis AG's plea on granting a patent to its anti-cancer drug, Glivec. The two companies make generic versions of the drug. While it is a blow to innovator companies, which are likely to go slow on patented drug launches, generic drug makers stand to benefit.
"It's a positive development for Indian pharma companies, as they can launch generic versions of such products in the future," says Ranjit Kapadia of Centrum Research.
Analysts say multinational companies (MNCs) would have to look at their patented portfolio and launch original innovations, rather than with incremental changes and risk getting their patent applications rejected. The ruling will prevent companies from evergreening their innovations with a view to maximising their gains from such patents.
Further, they need to change their pricing strategy to suit the purchasing power of Indian users, says an analyst. MNCs have been forced in the recent past to either license their drugs (as in the case of Bayer AG's anti-cancer Nexavar), compete with them or fail to get a patent on their drugs.
While less than 10 per cent of Indian pharma market sales come from patented products, analysts say generic companies, emboldened by on Monday's judgment, could launch products from this protected portfolio basket. Glenmark Pharmaceuticals on Monday launched an anti-diabetics drug, Januvia, which US-based Merck says infringes on its patents. Glenmark, which has priced the drugs at a discount to Merck's, says its brands are non-infringing. The Glenmark scrip closed 1.1 per cent higher.
The Indian pharmaceutical market over the last year has been negative for MNC pharma companies on many counts - be it the pharma pricing policy that impacted them more than Indian companies or the compulsory licensing case involving Bayer. "Indian generic majors, with a few exceptions get a substantial chunk of their sales from overseas markets and will be less impacted from policy changes, while for pharma MNCs, the regulatory and pricing environment is getting decidedly negative," says Hitesh Mahida of Fortune Research.
While the Glevac drug judgement had an impact on specific stocks, other generic makers such as Ranbaxy (2.65 per cent) and Dr Reddy's (3.34 per cent), too, moved up on this news as well as on US launches.
Dr Reddy's announced the launch of Zenatane, which is used in treating acne, with current market size of $309 million. Analysts expect the company to garner additional revenues to the tune of $35-$50 million and should boost its net profits to the tune of 2-2.5 per cent in FY14, estimates IndiaNivesh Securities.
Ranbaxy, on the other hand, announced it had resumed the supply of cholesterol-lowering drug Atorvastatin to the US market. The drug maker had to recall the drug in November last year and its market share tanked from 40 per cent to two per cent now. Analysts expect the company to get back some of the market share.
"It's a positive development for Indian pharma companies, as they can launch generic versions of such products in the future," says Ranjit Kapadia of Centrum Research.
Analysts say multinational companies (MNCs) would have to look at their patented portfolio and launch original innovations, rather than with incremental changes and risk getting their patent applications rejected. The ruling will prevent companies from evergreening their innovations with a view to maximising their gains from such patents.
Further, they need to change their pricing strategy to suit the purchasing power of Indian users, says an analyst. MNCs have been forced in the recent past to either license their drugs (as in the case of Bayer AG's anti-cancer Nexavar), compete with them or fail to get a patent on their drugs.
While less than 10 per cent of Indian pharma market sales come from patented products, analysts say generic companies, emboldened by on Monday's judgment, could launch products from this protected portfolio basket. Glenmark Pharmaceuticals on Monday launched an anti-diabetics drug, Januvia, which US-based Merck says infringes on its patents. Glenmark, which has priced the drugs at a discount to Merck's, says its brands are non-infringing. The Glenmark scrip closed 1.1 per cent higher.
The Indian pharmaceutical market over the last year has been negative for MNC pharma companies on many counts - be it the pharma pricing policy that impacted them more than Indian companies or the compulsory licensing case involving Bayer. "Indian generic majors, with a few exceptions get a substantial chunk of their sales from overseas markets and will be less impacted from policy changes, while for pharma MNCs, the regulatory and pricing environment is getting decidedly negative," says Hitesh Mahida of Fortune Research.
While the Glevac drug judgement had an impact on specific stocks, other generic makers such as Ranbaxy (2.65 per cent) and Dr Reddy's (3.34 per cent), too, moved up on this news as well as on US launches.
Dr Reddy's announced the launch of Zenatane, which is used in treating acne, with current market size of $309 million. Analysts expect the company to garner additional revenues to the tune of $35-$50 million and should boost its net profits to the tune of 2-2.5 per cent in FY14, estimates IndiaNivesh Securities.
Ranbaxy, on the other hand, announced it had resumed the supply of cholesterol-lowering drug Atorvastatin to the US market. The drug maker had to recall the drug in November last year and its market share tanked from 40 per cent to two per cent now. Analysts expect the company to get back some of the market share.