Cipla - Receives approval for Levalbuterol HCL - Karvy

MCap: US$4,896 mn; CMP: Rs 387; TP: Rs 419

Cipla received the approval for Levalbuterol HCL on December 13, 2013. This space has already six players in it and has a market size of around US$438 million. The key players include Watson (market share 22%), Sunovion (market share 11%), Redidose (market share 23%), Prasco (market share 28%), Teva (market share 10%) and Mylan (market share 6%).

We have assumed launch in Jan 2014 and a market share of 5% for both FY14 and FY15. We have incorporated revenues of USD 1.8 million and USD 7.2 million for FY14E and FY15E based on a 15% price erosion, 5% market share and a profi t share agreement. We migrate to consolidated numbers for FY14E and FY15E and introduce FY14E estimates at EPS of Rs 21.0 and Rs 21.0 respectively. We value the stock at Rs 419 based on 20x FY15E and rate the stock as HOLD.

Source : Equity Bulls

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