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While the domestic formulations market is poised for steady growth (13-14 per cent over FY15-18), analysts and brokerage firms expect the US generics business to fuel growth for Indian pharmaceutical companies.
According to brokerage firm Anand Rathi's report - growth opportunities, patent expiry worth $72 billion are estimated in the US. Already, some companies including Alembic, Natco and Indoco have either successfully filed for complex or differentiated generics as well as para-IV filings aimed at this opportunity.
"Industry data show exports of pharmaceutical products from India have registered a 19 per cent CAGR (compounded annual growth rate) over CY08-14 and are expected at a 16 per cent CAGR over CY14-18. The growth would be powered largely by the US generics business on account of that country's vast market," said Anand Rathi. Indian generics companies already have a strong abbreviated new drug application (Anda) pipeline. Anand Rathi feels the Anda approval-process time has considerably lengthened in the past few years due to the huge backlog at the USFDA and increasing regulatory non-compliance.
"The average length for an Anda approval has increased to four years now. However, with the introduction of GDUFA (Generic Drug User Fee Amendments) fees, the duration is expected to decline to 24-30 months," the report noted.
Alembic already has cumulative Anda filings at 68, of which 43 have been approved (including five tentative approvals), with 25 pending approval. The company expects to file eight to 10 Andas yearly, two approvals every quarter and six to eight product launches annually.
Torrent Pharmaceuticals has 53 Anda approvals, 19 pending approvals and 44 products being developed. According to the report, the Torrent management expects 18-20 products a year. "Acquisition of Zyg Pharma would boost its operations in dermatology, especially in the US, following the FDA-approved plant, though meaningful revenue contribution would start in the next three to four years," the Anand Rathi report said.
Unichem, too, is looking for traction in US generics. It has filed 34 Andas with the USFDA and received approval for 18. It has so far launched 12 products.
With more opportunities likely to open up in the next few years thanks to the expiry of block-buster products, Mumbai-based Ajanta Pharma has begun focusing on the US and European markets for further growth. By January 2016, the management expects to launch three products, which had recently received Anda approval, the report said. Ajanta has 25 Anda filings (expected market size of $1.5 billion), including five approved products. Of these, one has been commercialised through a marketing tie-up with Breckenridge Pharmaceuticals. Ajanta plans to launch four products shortly and to file six Andas every year.
Interestingly, an analysis of the 'drug master file' filings in calendar year 2015 shows that Indian companies have filed for 52 per cent of the total filings in the third quarter of CY15, higher than the 45 per cent aggregate witnessed in 2014 and 47 per cent in 2013. A pharmaceutical sector update by Emkay Research showed cumulatively, Indian companies filed for 89 molecules in the third quarter of CY15, compared to 49 in the second quarter.
