Swedish company Meda expands collaboration with Cipla - Angel Broking

Swedish generic maker Meda pharma is broadening its collaboration with the Indian drug major Cipla, expanding its exclusive rights to Dymista and future product development. Through the extended partnership, Meda now have full coverage in all growth markets in Latin- and South America, Middle East and Africa and Asia, including more than 120 new markets. Meda and Cipla will cooperate on product development of Dymista. Cipla will be responsible for formulation, while Meda will be responsible for clinical development, registration, marketing and sales. The companies will also collaborate on future production of Dymista and any new products developed. Dymista by the Meda was launched in the US in autumn 2012 and in Europe in 2013. Registration is underway in other key markets.

According to Meda, the product can be worth US $6 bn in US and European Union. The company has been receiving the milestone payment for the product during FY2013. Once the supplies are initiated the product will be a long term growth driver for the company, while the product being new in the market, would take time to scale up, the product can contribute meaningfully during FY2015. We conservatively estimate the product to contribute US $40mn in FY2014 and US$80mn in FY2015.

We maintain our buy with a target price of Rs. 477.

Source : Equity Bulls

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