Lupin Limited - Mylan launches Tricor: Buyers of the correction - Antique

Event

Mylan Inc. announced that its subsidiary Mylan Pharmaceuticals Inc. has shipped Fenofibrate Tablets, 48 mg and 145 mg. Mylan Pharmaceuticals Inc. received final approval from the U.S. Food and Drug Administration (FDA) for its Abbreviated New Drug Application (ANDA) for this product, which is the generic version of TRICOR® Tablets.

Background

Fenofibrate Tablets are indicated as adjunctive therapy to diet to reduce elevated low-density lipoprotein cholesterol (LDL-C), total cholesterol (Total-C), Triglycerides and apolipoprotein B (Apo B), and to increase high-density lipoprotein cholesterol (HDL-C) in adult patients with primary hypercholesterolemia or mixed dyslipidemia. Fenofibrate Tablets also are indicated as adjunctive therapy to diet for treatment of adult patients with severe hypertriglyceridemia. Fenofibrate at a dose equivalent to 145 mg has not been shown to reduce coronary heart disease morbidity and mortality in a controlled trial of patients with type 2 diabetes mellitus. Fenofibrate Tablets, 48 mg and 145 mg, had U.S. sales of approximately $1.3 billion for the 12 months ending March 31, 2013, according to IMS Health.

Impact

We were building in competition from Mylan only inQ3FY14,but post the earlier than expected launch ,competition from TRICOR will start in Q2FY14.

The resultant loss in opportunity in our view will be around 54mn$ or 280 crore. Additional competition could also put pressure on margins from the drug on count of pricing erosion.

Our take: Buyers into weakness

Lupin stays our preferred large Cap pick. We estimate a revenue growth of 19% and 20% for FY14e and FY15e, respectively on the back of 20 product launches per year. The impact of Mylan launch is less than <3% of FY14 Lupin sales. Any correction more than this magnitude should be used as a buying opportunity.

Source : Equity Bulls

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