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Here's why Lupin is best bet to play diabetes story in India over next 2-3 yrs, says Edelweiss Securities

Updated : December 20, 2019 12:35 PM IST

Most of Sun Pharma's USFDA observations are procedural in nature.

See approval of Ryaltris as decent opportunity for Glenmark.

Deepak Malik, pharma analyst at Edelweiss Securities spoke at length about various pharma stocks and his latest report which focuses on the opportunity of the diabetes segment in the domestic market.

Speaking about his report on diabetes in India, Malik said, “Diabetes market in India is around USD 2 billion with a 15 percent CAGR. So it is among the fastest growing categories in the overall Indian pharma market.”

“Indian players are now gaining traction in this market. Lupin in the last 2-3 years have launched very good products across categories in both insulin and non-insulin," he said in an interview with CNBC-TV18.

"Lupin is present in Dipeptidyl peptidase-4 (DPP-4), sodium-glucose transport protein 2 (SGLT2) and Glucagon-like peptide-1 (GLP-1) category. So it has one of the broadest portfolio across insulin and non-insulin and is the fastest growing company in this segment. It has 9 percent market share in the diabetes market,” he added.

“Generally people believe that Sanofi is the best bet to play the diabetes opportunity in India but with our research, we find that over the next 2-3 years Sanofi may move out and Lupin would be the best bet to play the diabetes story in India,” added Malik.

Talking about Sun Pharma’s Halol plant, he said, “There are a few observations which they have got in the recent visit of US FDA but most of the observations are procedural in nature. I think they will be able to resolve them except one where USFDA has raised some issue on the quality in sterile area, contamination which looks a bit serious but otherwise most of the others are procedural in nature and should be easily resolvable.”

With regards to Glenmark Pharma, he said, “Ryaltris is a specialty product for the US market. Glenmark filed this product a year back and few months back it got few observations and the product got delayed for approval." Now, it has got the approval and looks like a decent opportunity, he added.

However, the key thing to look at would be whether Glenmark sells this drug on its own or outlicenses it to somebody, to do the marketing part. If it plans to sell on its own then it will require front-end investments of USD 30-40 million which most other pharma companies like Lupin, Sun and others did when they launched specialty products in the US. "So, right now we are not clear whether it will be selling on its own or through the partner, but this can be USD 50-100 million kind of an opportunity in terms of revenue,” he added.

Published : December 20, 2019 12:35 PM IST

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