Plan B Takes Dr. Reddy’s Into Hot US Nexium Market
This article was originally published in PharmAsia News
Executive Summary
Shares of Dr. Reddy's surged on Indian bourses after the firm announced the launch of generic Nexium (esomeprazole magnesium) delayed release capsules in the US, after implementing a super-fast site transfer for the much anticipated product.
Dr. Reddy's Laboratories Ltd. has launched esomeprazole magnesium delayed-release capsules 20mg and 40mg in the US, a generic version of AstraZeneca PLC‘s Nexium, upon FDA approval and that the products were available in a bottle count size of 30.
Nimish Mehta, founder of Research Delta Advisors, told PharmAsia News’s sister publication Scrip Intelligence that he expects generic Nexium to generate revenues of around $50m for Dr. Reddy's over the next 12 months, assuming an 85% price erosion in the four-player generic market.
The FDA approved the first generic version of Nexium from Teva Pharmaceutical Industries Ltd. arm Ivax Pharmaceuticals Inc. in January this year, confirming Ranbaxy Laboratories Ltd.'s fears that it had forfeited its 180-day exclusivity for the 20mg and 40mg versions of the product.
Mylan Pharmaceuticals Inc. launched its generic version of Nexium in August, while Camber Pharmaceuticals (an arm of India's Hetero Drugs Ltd.) announced the launch of its version in September.
More potential participants including India's Lupin Ltd. are known to be awaiting approval for generic Nexium. Cipla supplies generic Nexium to Teva.
Nexium delayed-release capsules reported brand and generic moving annual total (MAT) sales of about $5.2bn for the 12 months ended July 2015 according to IMS Health data.
On Sept. 28, Dr. Reddy's shares rose by 5.54% to end at INR4191.85 ($63.3) on the Bombay Stock Exchange (BSE). In a clarification to the bourse, the firm attributed the spurt to the "high value" generic Nexium launch.
Mehta, however, maintained that the approval and launch also underscore the general R&D strength and quick turnaround capabilities vis-à-vis site issues that Dr Reddy's has been able to effect for the product.
Site Issues
Dr. Reddy's launch comes in the backdrop of some anxious moments for investors after the firm put into play a Plan B - essentially a site transfer - to retain the generic Nexium opportunity. This was necessitated after an FDA inspection of the firm's active pharmaceutical ingredients (API) site in Srikakulam raised certain compliance issues.
But Dr. Reddy's appeared to have had things under control and the firm's top brass in May this year said that a site transfer for the generic had been completed.
"The API is manufactured at one of our facilities in India which is approved by US FDA," Dr. Reddy's told Scrip, without identifying the new site.
Earlier, the firm also said that it believed that it had "comprehensively addressed almost all observations" raised by the FDA at the API site in Srikakulam.
(This story has also been published in Scrip Intelligence
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