With approval for one key product already in its kitty, Orchid Chemicals and Pharmaceuticals is awaiting nod for its two other important products from two of the foremost regulatory bodies in the coming year.
The Chennai-based company is expecting approvals from the United States Food & Drugs Administration (US FDA) and Medicines and Healthcare products Regulatory Agency (MHRA) of the EU, in calendar year 2010, for its class of antibiotics called carbapenems.
Orchid has a presence in drugs like imipenems and meropenems (from the carbapenem class) which have a total potential of about $1 billion in the US and EU markets. According to C H Ram, head, communications and investor relations, as there is not much competition, the opportunity for carbapenems would be huge.
“We should be able to get a good market share for the two products.” Other than the innovator companies (Merck for imipenem and AstraZeneca for meropenem), Gurgaon-based Ranbaxy Laboratories is the only other generic company to have made filings for the two drugs.
Analysts agree that though the opportunity is huge with limited competition, it hinges on how fast Orchid can get approvals from the two regulatory authorities. If approval is delayed, the opportunity depletes.
“However, on a conservative estimate, we expect about $50 million from both the US and EU markets in the first year, that is 2010-11, subject to approvals,” says Sarabjit Kour Nangra, vice-president, research, at Angel Broking.
Ram says that other than the carbapenems, growth for the company would come from its other major product Tazo-Pip, or tazobactam piperacillin, an antibacterial combination product used for treating moderate-to-severe infections.The Rs 1,300 crore Orchid launched generic Tazo-Pip in both the EU and US sometime ago and here the combined potential is about $800 million.
Orchid holds six-month exclusivity for Tazo-Pip in the US, making it the only company, other than the innovator Wyeth, to market the product during that period. Tazo-Pip is one of the fastest growing antibiotic injectibles, growing at 19% annually, as per industry estimates.
Analysts assume Orchid to get about $84 million in the US, during the 180-day exclusivity period that it holds, and about $20-30 million from the EU by March 2011. “Near-term visibility would be from Tazo-Pip and carbapenems,” says Nangra of Angel Broking.
“In financial year 2010-11, the full impact of Tazo-Pip will be seen, along with partial impact of carbapenems. Injectibles have higher penetration and higher margins as prices are higher,” says Ram.
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