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Rx and market share trends for key US products: IIFL Securities

  • India Infoline News Service |
  • 16 Dec, 2022 |
  • 11:28 AM
Key takeaways include:
  • While Dr. Reddy’s market share (MS) in Revlimid increased sharply to ~18% in November 2022, Teva/Natco’s MS moderated to 8-10% over October-November 2022 versus 11-14% over March-September 2022, per latest integrated unit (IU) volumes.
 
  • Sun’s Ilumya is clocking 6% QoQ/40% YoY growth during Q3FY23 QTD, while Cequa’s IU volumes are up 10% QoQ/52% YoY. Winlevi clocked 386K TRx in the first year of launch - significantly higher than other acne products.
 
  • During Q3FY23 QTD, Cipla arrested the decline in Albuterol MS and clocked 17.8% MS, up from 16.4% in Q2FY23. Lupin, however, lost MS in Albuterol for the second consecutive quarter; down from 15.7% in Q1FY23 to 15.5%/14.9% in Q2/Q3 QTD.
 
  • On the back of strong execution in peptide injectables, Cipla garnered 14% IU volume MS in Lanreotide as of November 2022. Hence, the company clocked mid-teens MS ahead of management guidance for end-FY23.
 
  • Among generic players, Dr. Reddy’s continues to maintain the highest MS (16%) in Vascepa, while maintaining 2nd highest MS in Suboxone (20%) during Q3 QTD.
 
  • Biocon’s MS in Insulin Glargine expanded only marginally in Q3FY23 QTD (11.3% versus 10.9% in Q2FY23). Sanofi’s unbranded Lantus and Eli Lilly’s interchangeable product remain key risks for Biocon to gain incremental MS.

Revlimid – As a result of 7 generic launches till November 2022 and sharp uptick in Dr. Reddy’s MS, innovator’s MS moderated to ~66%

Teva/Natco’s MS per integrated units (IU) after sustaining in 11-14% range over March-September 2022 has now moderated to 8-10% over the last two months. This is in-line with settlement agreement with innovator stating that Teva/Natco’s volume MS will be in mid-single digit during the first year of launch.

Dr. Reddy’s MS increased sharply to ~18% in November versus 8% in October; however, its MS will likely moderate going forward, akin to Teva/Natco, as analysts at IIFL Securities believe BMS (innovator) would have capped Revlimid MS to single-digit for all generic companies. This ties with innovator BMS’ agreement with Teva/Natco (mid-single-digit) and Alvogen (up to single-digit).

Analysts at IIFL Securities expect Dr. Reddy’s, Cipla and Zydus to benefit from Revlimid in the near term, along with Sun, Aurobindo, Lupin, Torrent and Alembic upon launch. Still, there remains a risk of antitrust lawsuit on pay-for delay settlement of Revlimid patent litigation. This is due to Walgreens filing antitrust lawsuit against BMS and Teva/Natco alleging that the settlement has resulted into higher prices of generic drug than what would have prevailed in absence of such settlement.

Ilumya – Average monthly integrated units (IU) volumes in October and November 2022 are up 6% QoQ versus monthly run-rate in Q2FY23

Per Symphony data, Ilumya’s average TRx volumes in October and November 2022 are flat versus average monthly TRx in Q2FY23. However, IU volumes are up 6/40% QoQ/YoY, compared to average monthly IUs in Q2FY23/Q3FY22.

Analysts at IIFL Securities believe Ilumya’s robust traction will sustain despite strong competition from big pharma companies in the US in psoriasis drugs owing to better compliance, cost competitiveness and dosing convenience. They expect Ilumya’s global revenue to grow at ~24% CAGR from USD315 million in FY22 to USD600 million in FY25. Ilumya’s growth can potentially be aided by psoriatic arthritis indication (in P3 clinical trials currently - likely approval in FY25 per IIFL Securities’ estimate).

Cequa – Sun continues to gain MS in dry eye ophthalmic products, despite generic competition in Restasis

Per Symphony data, Cequa’s TRx volumes in in October and November 2022 are up 9% QoQ versus Q2FY23. Cequa’s average monthly IU volumes in October and November 2022 increased 10/52% QoQ/YoY, compared to average monthly IUs in Q2FY23/Q3FY22.

In overall dry eye ophthalmic market, Apotex/Mylan/KVK Tech/Lupin (Restasis generic/AG players) and Sun (Cequa) gained MS from Allergan (Restasis), Novartis (Xiidra) and Alcon (Eysuvis) during Q3FY23 QTD. Cequa’s MS ramped up to 4.3% versus 3.9% in Q2 and Restasis generic/AG players captured 16% MS versus 15% in Q2.

Sun has exhibited strong growth in Cequa, despite generic competition in Restasis. Analysts at IIFL Securities expect Sun to clock 19% CAGR for Cequa over FY22 to FY25 - lower than 24% for Ilumya due to the risk of price erosion in overall dry eye ophthalmic market from Restasis generics.

Winlevi – TRx volumes stronger than acne surrogates in the first year of launch

Having launched Winlevi in the US in November 2021, Sun clocked 386K TRx in the first year of launch which is significantly higher than other acne products, viz. Aczone (369K), Epiduo Forte (205K), Acanya (131K) and Onexton (96K).

Per latest monthly TRx data till November 2022, Winlevi’s average monthly TRx run-rate in October and November 2022 is down 11% QoQ, compared to average monthly TRx volumes Q2FY23. Though Sun’s management in Q2FY23 earnings call indicated that decline in Winlevi TRx volumes was a temporary blip and the same would recover in one quarter, average monthly TRx volumes in October and November 2022 are still 12% below monthly run-rate in H1FY23.

Absorica – Through brand, AG and LD versions, Sun’s MS is stable at 41-42% in FY23 YTD

Teva and Upsher Smith/Mayne have captured 5/42% MS in Absorica, respectively. Sun’s MS having declined meaningfully in H2FY22 has stabilized in 41-42% range over 8MFY23. Analysts at IIFL Securities expect Sun’s revenue from Absorica to decline from USD70 million in FY22 to USD30 million in FY25 as they factor-in MS loss.

Largely positive performance by Sun’s old specialty products during Q3FY23 QTD

Odomzo’s average monthly IUs in October and November 2022 declined 12% YoY/grew 12% QoQ, compared to average monthly IUs in Q2FY23/Q3FY22. Yonsa, however, posted 3% QoQ and YoY decline in average monthly IUs in October and November 2022.

Levulan clocked robust 124/29% QoQ/YoY growth in average monthly IUs during October and November 2022 versus average monthly IUs in Q2FY23/Q3FY22.

Sun’s US generics business (ex-Taro, ex-Specialty) to be aided by MS ramp-in complex generics

Sun has continued to gain MS in Pentasa given the absence of incremental generic competition due to difficulties in assessing bioequivalence. Sun has captured 52% MS in Pentasa during Q3FY23 QTD (up from 48% in Q2), per latest weekly TRx data ending December 2.

After launching in March 2022 and 180-day exclusivity expiring in September 2022, Sun’s IU volume MS in Ambisome during October and November 2022 stood at ~27% (up from 17% in Q2). While Aurobindo has received approval for Ambisome during November 2022, analysts at IIFL Securities believe the company has not yet launched the product, given that IU volumes are not reflecting in latest Symphony data.

Having clocked ~1% MS post launch during Q2FY23, Sun has now captured 1.7% MS during Q3FY23 QTD, per latest weekly TRx data. Analysts at IIFL Securities believe ramp-up in Specialty and complex generic products will help Sun in partly offsetting the impact of USFDA import alert on Halol plant.

From Halol plant, Sun currently generates USD150-160 million in sales (~3% of consolidated revenue). Analysts at IIFL Securities expect Sun to incur USD50-60 million of remediation cost to make Halol compliant with USFDA’s cGMP (current Good Manufacturing Practice). This impact of USD200-220 million will also be offset by 14 products that are exempted from USFDA import alert. Analysts at IIFL Securities believe the import alert could impact Sun’s FY24 estimated EBITDA/PAT by 3-4%.

Albuterol – While Cipla’s MS rebounded during Q3FY23 QTD, Lupin continued to lose MS

Cipla’s MS in overall Albuterol market moderated to 16.4% during Q2FY23 versus 18.4% in 1QFY23. During Q3FY23 QTD, Cipla arrested the decline and clocked 17.8% MS. Lupin, however, lost MS in Albuterol for the second consecutive quarter, down from 15.7% in Q1FY23 to 15.5% in Q2 and 14.9% in Q3 QTD.

Lupin’s MS in Proair improved to ~34% in Q3 QTD from ~30% in Q2FY23 on the back of MS gains from Teva, while Hikma’s MS in Proventil improved from ~15% in Q2FY23 to 18% in Q3 QTD as a result of MS gains from Cipla (71% MS in Q3 QTD from 74% in Q2).

Brovana – Cipla, Sun and Slate Run gaining MS at the expense of Lupin (including brand)

While Cipla has exhibited strong MS gains in Brovana over the last 4-5 quarters (from 18% in Q2FY22 to 39% in Q2FY23), Lupin has consistently ceded MS to other generics including Cipla.

Lupin acquired Brovana branded version from innovator at 1.5x sales in October, even though innovator had lost 83% MS in six quarters, i.e., from 96% in Q1FY22 to 13% in Q2FY23. Lupin’s combined MS (including acquired brand) has declined from 31% at the time of acquisition in October 2022 to 25%, per latest weekly TRx data.

Advair – Generic companies’ struggle for gaining MS continues

GSK (innovator) has firmly retained 55% MS during FY23 YTD (till 2-Dec); MS of Prasco (AG) and generics (Hikma, Mylan, Teva) also remained flat. Given that USFDA has already issued establishment inspection report (EIR) for Indore facility, indicating that pre-approval inspection (PAI) is closed, analysts at IIFL Securities expect Cipla to launch Advair in Q4FY23 and generate USD60 million in revenue each in FY24/25 (6-7% of US revenue).

Perforomist – Teva ceded 10.5% MS to Mylan and Alembic during Q3FY23 QTD

Alembic launched Perforomist in April 2022 and has captured 16.5% MS, per latest weekly TRx data ending 2-Dec. During Q3FY23 QTD, Teva ceded 6/4.5% MS to Mylan (innovator) and Alembic, respectively. However, Teva has been gaining MS back from Mylan in recent weeks. While Lupin has approval in place for Perforomist, analysts at IIFL Securities believe Lupin has not yet launched the product, considering TRx volumes are not reflecting in latest Symphony data.

Lanreotide – Cipla achieving mid-teens MS ahead of management guidance of end-FY23

On the back of strong execution capabilities in peptide injectables, Cipla has garnered 14% IU volume MS in Lanreotide as of November 2022. The company has clocked mid-teens MS ahead of management guidance of end-FY23. Analysts at IIFL Securities expect Cipla’s revenue from Lanreotide to improve from ~USD55 million in FY23 to USD85 million in FY25. They believe Cipla’s superior execution to continue upon launch of 5 peptide injectables currently pending for USFDA approval, including Vasostrict, Forteo & Saxenda (IIFL estimate).

Vasostrict – Par, Eagle and Dr. Reddy’s lost significant MS to Aurobindo, Amneal, hastar & American Regent in Q3 QTD

After launching generic Vasostrict during Q2FY23 Aurobindo/Amneal/hastar captured 16.5/17.5/6.7% IU volume MS as of November 2022, while American Regent through 505(b)(2) products ramped up its MS from 7% in Q2 to 17.5% as of November 2022. This led to Par/Eagle/Dr. Reddy’s each losing 8-17% MS in Q3 QTD versus Q2FY23.

Vascepa – Dr. Reddy’s continues to maintain the highest MS among generics

During Q3FY23 QTD, all generic players gained MS from innovator. Despite Dr. Reddy’s gaining the least MS and Hikma posting the highest MS gain, Dr. Reddy’s continues to maintain the highest MS (~16%) in Vascepa among generic players.

Given that innovator has over 60% MS in Vascepa currently, analysts at IIFL Securities believe generic companies have further opportunity to garner additional MS from the innovator. They believe Vascepa continues to remain a meaningful product for Dr. Reddy’s.

Suboxone – MS for all players largely stable QoQ across all players during Q3FY23 QTD

With innovator and Alvogen having 34-35% MS and Dr. Reddy’s maintaining the 2nd highest MS among generic players. While Apotex has USFDA approval in place, analysts at IIFL Securities believe it has not yet launched the product, as TRx volumes are not reflecting in latest Symphony data. Generic players can potentially lose MS upon Apotex’s launch.

Insulin Glargine – Biocon’s MS expanded only marginally in Q3 QTD; unbranded Lantus and Eli Lilly’s interchangeable product remain key risks

Biocon’s MS in Q3FY23 QTD stood at 11.3%, up only marginally from 10.9% in Q2FY23. Analysts at IIFL Securities believe Biocon will continue to face headwinds in further MS ramp-up in Insulin Glargine owing to: a) Eli Lilly securing USFDA approval for interchangeable version of Insulin Glargine (they believe Eli Lilly is yet to launch the same as latest Symphony TRx data is not reflecting volumes). b) Sanofi launching unbranded version of Lantus. c) Sanofi reducing out-of-pocket costs for uninsured patients by ~65% in the US.

Trastuzumab – Biosimilar players continued to gain MS at the expense of innovator

During Q3FY23 QTD, biosimilar players gained 0.2-0.9% MS versus Q2FY23 except Merck (largely flat MS). Biocon’s MS after declining during early FY23 has rebounded to 8.6% in October and November 2022. Pfizer continues to gain the highest incremental MS among all biosimilar players.

Pegfilgrastim – Biocon clocked the highest MS since launch

During Q3FY23 QTD, Sandoz’ MS improved only marginally versus Q2. However, Biocon’s MS improved from 10.3% in Q2FY23 to 11.6% in Q3 QTD. Biocon’s MS at 11.9% as of November 2022 is the highest since launch in 2018.

USFDA’s 2nd CRL for Biocon’s Aspart can delay approval/ launch, while it awaits response to CAPA submitted for Bevacizumab

Following PAI for Bevacizumab, rh-Insulin, Insulin Aspart and capacity expansion inspection for Trastuzumab, USFDA issued ‘483s with 11 observations for Bangalore plant and 6 observations for Malaysia plant. Of this, observation pertaining to microbial control can potentially be difficult for Biocon.

Biocon has submitted CAPA plan for Bevacizumab. Should USFDA deem the same satisfactory, Biocon can potentially launch the product upon approval. However, given that Pfizer and Amgen have already captured 84% of Bevacizumab market and Amneal launched its biosimilar in October 2022, the product is unlikely to be a meaningful opportunity for Biocon.

While 2nd USFDA CRL for Aspart does not have repeat observations or development related products and management has indicated that the observations largely pertain to completion of CAPA plan submitted in response to the 1st CRL. However, analysts at IIFL Securities believe the 2nd CRL will delay USFDA approval for Aspart; Biocon is unlikely to generate meaningful revenue from this product in the near term.
 

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