Can Domestic Formulations Shield Indian Pharma from US Pricing Pressure in Q3?
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Lupin is anticipated to report a robust performance this quarter, buoyed by strong sales of Tolvaptan and Mirabegron in the US market. The latest insights from the ET Intelligence Group suggest that Indian pharmaceutical companies are poised for a mixed third quarter. Growth is expected to stem from domestic formulations and specialty launches, even as they navigate pricing pressures in the US. Here’s a closer look at the Quarter 3 projections:
Highlights of Domestic Formulations and US Market Dynamics
– Lupin: Projected to deliver a strong quarter, driven by continued success in its US business with Tolvaptan and Mirabegron.
– Sun Pharmaceuticals: Anticipated mid-single-digit revenue growth, fueled by specialty and domestic segments. Expected to outperform the industry, thanks to new product launches in domestic formulations. However, US sales may decline due to reduced Revlimid sales. Still, it is considered one of the least affected companies by pricing pressures.
– Dr. Reddy’s Laboratories: Forecasted to experience muted performance, impacted by pricing pressures and decreased contributions from significant products in North America. The domestic sector is expected to remain resilient, driven by vaccine, cardiac, and pain therapy traction.
– Divi’s Laboratories: Set to achieve double-digit growth in custom synthesis, distinguishing itself positively in a challenging market.
– Aurobindo Pharma: Expected to show steady gains from injectables and improved operational efficiencies, despite pressures on key products.
– Cipla: Forecasted to post moderate growth, supported by high single-digit growth in the domestic market and new launches like Yurpeak, a Type 2 diabetes drug. However, pricing pressure and competition in the US market may hamper performance.
Future Considerations and Market Sentiment
Key factors for investors to monitor include:
– Progress in GLP-1 approvals and biosimilar filings.
– Developments regarding potential partnerships in the US to mitigate tariff-related risks.
– The potential impact of emerging market dynamics on overall growth.
While US pricing pressures loom large, Indian pharmaceutical companies may find refuge in their domestic formulations. These offerings can enhance their market position, sustain growth, and deliver a competitive edge, particularly in challenging times.
In conclusion, while the Q3 outlook for Indian pharma remains mixed, the resilience of domestic formulations could prove to be a crucial buffer against US pricing pressures. As companies like Sun Pharma and Lupin leverage new launches, the future of domestic formulations appears promising in safeguarding against external market challenges.