Views on SPARC Licenses XelprosTM (Latanoprost BAK-free) to Sun Pharma - Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research - Pharma, Angel Broking)

SPARC Licenses XelprosTM (Latanoprost BAK-free) to Sun Pharma:

"Sun Pharma Advanced Research Company Ltd (SPARC) and Sun Pharmaceutical Industries Ltd. announced that SPARC has licensed out XelprosTM (Latanoprost BAK-free eye drops) to a subsidiary of Sun Pharma for the US market. In addition to up-front payment of US$3mn, SPARC will receive certain other milestone payments, both totalling to US$16mn from Sun Pharma. It is also eligible for certain defined royalties and additional milestone payments linked to the actual sales performance of XelprosTM.

In December 2014, the US FDA had issued a Complete Response letter (CRL) to SPARC for its New Drug Application (NDA) for Latanoprost BAK-free eye drops. This CRL has since been replied to and a response from the USFDA is awaited. The in-licensing of XelprosTM will facilitate Sun Pharma's entry into the branded Ophthalmology segment in the US. This is a part of Sun Pharma's strategy to strengthen its presence in the US specialty segment.

Also, the Sun Pharma has recently appointed Jerry St. Peter as Vice President and Head, Ophthalmology for Sun Pharma's US business. Jerry has a successful commercial and general management track-record in specialty pharmaceutical companies with an extensive knowledge of the Ophthalmology market. He will lead Sun's ophthalmic business in the US and will commercialize XelprosTM.

Glaucoma is largest segment in ophthalmic market. 2.2mn patients are diagnosed in US; estimated to reach 3mn by 2020. Glaucoma products sales in US at ~ $US2bn, Prostaglandin products constitute 55% of sales and were growing at 6% in 2013. According to SPARC, Latanoprost is the largest selling PG with 63% volume share (22mn units in 2013) in US. Estimated potential patient population for SPARC's Latanoprost is ~ 15 % patients on Xalatan® and its generics and new patients with high risk of developing OSD. Thus the product can potentially add robust sales for the company and enhance its speciality business in US. We maintain our BUY with a price target of INR 1041."

Shares of SUN PHARMA ADVANCED RESEARCH COMPANY LTD. was last trading in BSE at Rs.390.85 as compared to the previous close of Rs. 398.2. The total number of shares traded during the day was 222585 in over 5490 trades.

The stock hit an intraday high of Rs. 397 and intraday low of 385. The net turnover during the day was Rs. 86932949.

Source : Equity Bulls

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