Institutional Equities

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1 Sector Update Institutional Equities Pharmaceutical Sector September 7 Prescription Charts of Interest August 7 We observed the prescription chart trend and institutional wholesale acquisition cost (WAC) of key drugs over the period January August 7. Following are our key findings: Liposomal Doxorubicin (Doxil generic): There is apparently a major swing in market share with the entry of Dr. Reddy s Laboratories (DRL) in July this year. DRL has ramped up its market share to 6 by grabbing the share from Sun Pharmaceutical Industries (SPIL) and JNJ. Exhibit : gdoxil prescription trend Doxil Jan/7 Feb/7 Mar/7 Apr/7 May/7 Jun/7 Jul/7 Aug/7 Dr. Reddy's Sun Pharma Johnson & Johnson Exhibit : gdoxil institutional WAC Johnson & Johnson Dr. Reddy's Sun Pharma Vishal Manchanda Research Analyst vishal.manchanda@nirmalbang.com Decitabine (Dacogen generic): In Decitabine, new generic entrant (Intas) is apparently drawing market share from the innovator (Otsuka). DRL continues to maintain its market share. Otsuka supplies seem to be inconsistent, which is benefiting generic players. Exhibit : gdacogen prescription trend Dr. Reddy's Accord Sun Pharma Otsuka Exhibit : gdacogen institutional WAC Dr. Reddy's Accord Otsuka Sun Pharma

2 Odomzo: Odomzo prescriptions have been picking up of late, driven by marketing and promotion efforts from SPIL. Since the acquisition of Odomzo rights from Novartis, SPIL has doubled market share in Odomzo from % to 6%. The current market share translates to an annual run rate of US$7mnUS$mn. Exhibit : Odomzo prescription trend Exhibit 6: Odomzo institutional WAC Sun Pharma Hoffman 6 6 Sun Pharma Hoffman Sevelamer Carbonate (Renvela generic): Aurobindo Pharma has ramped up its market share to % after the launch in midjune 7. Exhibit 7: grenvela prescription trend Exhibit : grenvela institutional WAC Aurobindo Aurobindo Abacavir/Lamivudine(Epzicom generic): Cipla and Aurobindo Pharma continue to gain market share, while Teva (the first to launch) and Prasco (authorised generic maker) are gradually losing market share. The innovator, Viv Healthcare, still holds about % market share. Indian players should further strengthen their position in the market. Exhibit 9: gepzicom prescription trend Exhibit : gepzicom institutional WAC % % % % Epzicom Prasco Viv Healthcare Aurobindo Teva Lupin Cipla Viv Healthcare Lupin Teva Prasco Cipla Aurobindo Pharmaceutical Sector

3 Simvastatin/Ezetimibe (Vytorin generic): DRL continues to build market share in Vytorin. So far DRL has gained bps incremental market share in the current quarter. The innovator still controls 6% of the market, indicating that there is headroom for generics to strengthen their presence. Exhibit : gvytorin prescription trend Impax Dr. Reddy's Teva Merck Sernivo: On YoY basis, Sernivo prescriptions are up %, but they have declined in absolute numbers over the past few months. We believe the decline may be because of seasonal changes. Psoriasis disease is more aggressive in winter months. At the current run rate, Sernivo spray annual sales should trace to US$m in FY. Exhibit : Sernivo prescription trend (Nos),,,,,,,, Dr. Reddy's Oseltamivir Phosphate Capsules (Tamiflu generic): Alvogen/Natco Pharma, which closed the last flu season (ended March 7) with about market share, will see price and market share erosion in the upcoming flu season as there will be five players competing in the market. Amneal and Macleod Pharma are recent entrants. Exhibit : gtamiflu prescription trend 7 6 Alvogen Zydus HoffmanLa Roche Amneal Pharmaceutical Sector

4 Jan/7 Feb/7 Mar/7 Apr/7 May/7 Jun/7 Jul/7 Aug/7 Institutional Equities Biosimilar market share trend Basaglar: Eli Lilly launched Basaglar in the US in December 6. Over a period of eight months the company grabbed of the insulin glargine pie. The market share rampup is impressive as biosimilar penetration has always been difficult in chronic segments. Eli Lilly has been able to execute by virtue of its broad portfolio of offerings for diabetes patients. Exhibit : glantus prescription trend Exhibit : glantus institutional WAC Eli Lilly 6 9 Eli Lilly Filgrastim: Filgrastim represents a hospital product which is relatively easier for biosimilar players to crack. Biosimilars now represent % of Filgrastim market in the US. Zarxio, which was launched in late, has seen its market share getting ramped up to % over the past months. Exhibit 6: Filgrastim prescription trend Amgen Novartis Teva Infliximab: It has been around six months since Pfizer launched a biosimilar of Remicade, but the offtake is dismal with low singledigit market share. The low offtake represents the hurdles for biosimilars in chronic segment of the market, which are driven by physician prescriptions. A wider acceptance can be created if the biosimilar player has a portfolio of product offering. Exhibit 7: Infliximab prescription Trend (Nos), 7, 6,,,,,, Pfizer Johnson Exhibit : Infliximab institutional WAC Pfizer Johnson & Johnson Pharmaceutical Sector

5 Disclaimer Stock Ratings Absolute Returns BUY > % ACCUMULATE % to% SELL < % This report is published by Nirmal Bang s Institutional Equities Research desk. Nirmal Bang group has other business units with independent research teams separated by Chinese walls, and therefore may, at times, have different or contrary views on stocks and markets. Reports based on technical and derivative analysis may not match with reports based on a company's fundamental analysis. This report is for the personal information of the authorised recipient and is not for public distribution. This should not be reproduced or redistributed to any other person or in any form. This report is for the general information for the clients of Nirmal Bang Equities Pvt. Ltd., a division of Nirmal Bang, and should not be construed as an offer or solicitation of an offer to buy/sell any securities. We have exercised due diligence in checking the correctness and authenticity of the information contained herein, so far as it relates to current and historical information, but do not guarantee its accuracy or completeness. The opinions expressed are our current opinions as of the date appearing in the material and may be subject to change from time to time without notice. Nirmal Bang or any persons connected with it do not accept any liability arising from the use of this document or the information contained therein. The recipients of this material should rely on their own judgment and take their own professional advice before acting on this information. Nirmal Bang or any of its connected persons including its directors or subsidiaries or associates or employees or agents shall not be in any way responsible for any loss or damage that may arise to any person/s from any inadvertent error in the information contained, views and opinions expressed in this publication. Nirmal Bang Equities Private Limited (hereinafter referred to as NBEPL ) is a registered Member of National Stock Exchange of India Limited, Bombay Stock Exchange Limited. NBEPL has registered with SEBI as a Research Entity in terms of SEBI (Research Analyst) Regulations,. (Registration No: INH6 9.. to..). NBEPL or its associates including its relatives/analyst do not hold any financial interest/beneficial ownership of more than % in the company covered by Analyst. NBEPL or its associates/analyst has not received any compensation from the company covered by Analyst during the past twelve months. NBEPL /analyst has not served as an officer, director or employee of company covered by Analyst and has not been engaged in marketmaking activity of the company covered by Analyst. The views expressed are based solely on information available publicly and believed to be true. Investors are advised to independently evaluate the market conditions/risks involved before making any investment decision. Access all our reports on Bloomberg, Thomson Reuters and Factset. Team Details: Name Id Direct Line Rahul Arora CEO rahul.arora@nirmalbang.com Girish Pai Head of Research girish.pai@nirmalbang.com / Dealing Ravi Jagtiani Dealing Desk ravi.jagtiani@nirmalbang.com +9 96, Pradeep Kasat Dealing Desk pradeep.kasat@nirmalbang.com /, Michael Pillai Dealing Desk michael.pillai@nirmalbang.com /, Nirmal Bang Equities Pvt. Ltd. Correspondence Address B, /, Marathon Innova, Nr. Peninsula Corporate Park, Lower Parel (W), Mumbai. Board No. : 9 96 /; Fax. : 96 Pharmaceutical Sector