>Ranbaxy (KR Choksey)

Daiichi expanding its wings to Indian market

Ranbaxy to Launch Daiichi Sankyo’s innovative antihypertensive drug, “Olvance” in India

First product from Daiichi Sankyo’s portfolio to be introduced through Ranbaxy -
Ranbaxy, the idnian subsidiary of Japan’s Daiichi Sankyo has annpounced that Ranbaxy would launch Olvance (Olmesartan Medoxomil, antihypertensive), which was originally discovered by Daiichi Sankyo. This follows a licensing agreement between the two companies authorizing Ranbaxy to promote and market the drug in India.

Benefits to Daiichi Sankyo

• This move would scale up Daiichi’s innovative product introductions in India, through Ranbaxy.

• The drug is expected to be launched in 50 countries world wide thus strengthening company’s portfolio in the antihypertensive segment.

Benefits to Ranbaxy

Launch would strengthen Ranbaxy’s presence in the antihypertensive segment.
• Olvance is an effective, fast acting and well tolerated antihypertensive agent aand the clinical trials of Olmesartan have shown it to be significantly more effective at reducing blood pressure. Ranbaxy being a significant player in the cardiovascular disease segment and leader in Statins the cholesterol reducing agents the introduction of Olvance will further strengthen Ranbaxy’s presence in the antihypertensive segment.

Impact on Earnings

“Olvance”, an antihypertensive drug, enjoyed a market size of ~ Rs 42 Cr last year (growth of nearly 91%). We expect the drug, which would be launched in April, 2009, to contribute ~ Rs 20 -25 Cr to the topline of the company from the Q2 CY09. The antihypertensive segment enjoys the domestic market size of ~ Rs. 2500 Cr.

Competitor

Glaxo Smith Kline Pharma (GSK), which is having a licensing agreement with Daiichi, would be launching the same drug in India; and would turn out to be a major competitor. Apart from GSK there are two to three small players in the same drug category.

Valuation

We have revised our earnings estimate keeping in view the revenue inflow from the approval for the generic version of Imitrex and the launching of anti hypertensive drug, Olvance. We are positive about Ranbaxy as Medicines and Healthcare products Regulatory Agency (MHRA) of UK, and the Therapeutic Goods Administration (TGA), Department of Health and Ageing of the Australian Government, have issued Good Manufacturing Practice (GMP) certificates for its manufacturing site at Paonta Sahib (India), following a joint audit conducted in October 2008. The MHRA approval will not only cover product filings for the UK but will also apply to product filings for the entire European Union.

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