The spat over Norvasc may have left several generics makers with high blood pressure, but for Matrix Laboratories, there is every reason to smile.
HYDERABAD: The spat over Norvasc may have left several generics makers with high blood pressure, but for Matrix Laboratories, there is every reason to smile.
With the US Food and Drug Administration deciding in favour of Mylan’s generic version of Norvasc, the Hyderabad-based Matrix, 71.5% owned by Mylan, is ready to share some of the big spoils.
Mylan began marketing the generic version of Norvasc, which had sales of $2.7 billion in 2006, on March 23, 2007, on the basis of its first-to-file status on its Para IV application.
The patent on Norvasc had expired on March 25, leaving the market open to makers of the drug in its generic form, but without any clarity on who could market it first.
The FDA clarified to the District Court of Colombia on Wednesday that it had decided not to approve any ANDAs other than that of Mylan at this point of time.
Matrix is set reap rich upsides as it supplies the bulk active pharmaceutical ingredient (API) for the drug to Mylan.
Merrill Lynch analyst Visalakshi Chandramouli estimates that Mylan had already bagged 40% market share for amlodipine besylate.
The drug is expected to generate revenues worth $330 million during the six-month exclusivity period. For Matrix, that would mean $14 million additional profit on $25 million additional revenues.
The Hyderabad firm is set to reap further riches subsequent to its $736 million strategic acquisition by Mylan in January 2006.
Some of these benefits will be visible in the second half of the current financial year with at least 12-15 product transfers expected to take place over the next year, Chandramouli said in a report to clients on Wednesday.
Based on the expected integration benefits, she forecast a 77% EPS growth for Matrix over FY07-09 compared with the estimated 55% de-growth in FY07.
The Matrix share is trading at 40% discount to Mylan’s acquisition cost, which makes the Hyderabad-based company an attractive candidate for a possible complete buyout by the American drug major, Chandramouli said.
Merrill sees an estimated a 27% potential upside in the stock at Rs 229 per share.
Three key benefits are seen for Matrix from the Mylan deal. Matrix is one of the largest API players with over 70 drug master files, 165 active pharma ingredients (API) in the market or under development and 10 API manufacturing facilities. Mylan is expected to capitalise on this infrastructure to step up product sourcing from India. Secondly,
Mylan could also provide a major path for Matrix for enhancing its ARV franchise, while thirdly, the majority owner could leverage Matrix’s European acquisition DocPharma to push its products in the continent.
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}
)
){kind=small}
){kind=small}
)
)
)
)
)
){kind=small}
){kind=small}
){kind=small}
){kind=small}
){kind=small}