Glenmark Pharma’s FabiFlu  Booster Is Waning
Employees, left, serve customers at a pharmacy during a lockdown imposed due to the coronavirus in Mumbai, India. (Photo: Dhiraj Singh/Bloomberg)

Glenmark Pharma’s FabiFlu Booster Is Waning

A three-quarter growth run at Glenmark Pharmaceuticals Ltd. may be coming to an end, said analysts, as its FabiFlu now faces many more competitors.

As the first company in India to receive regulatory approval for oral antiviral Favipiravir (sold under the FabiFlu brand) in June 2020, for the treatment of mild to moderate Covid-19, Glenmark notched up an impressive 85-90% market share by September.

The drug boosted Glenmark to become one of the fastest-growing companies by sales in the past few quarters, showed data by the All Indian Origin Chemists & Distributors.

In September, Glenmark was the second-fastest-growing among top 20 companies on a moving annual turnover basis, rolling yearly sum or sales from September 2019 till September 2020, according to latest data by Quintiles and IMS Health, Inc (IQVIA).

That was the month in which FabiFLu emerged the number one brand in the country, according to IQVIA.

MAT growth prior to the launch of FabiFlu was 8-10%, brokerage Prabhudas Lilladher said in a note.

Volume, price and new product growth contribute to MAT.

For Glenmark new product growth contributed the highest to its MAT growth — so, if MAT growth was 16.6%, 13% came from new products, 6% due to price increase and volume-led decline was 2.5% .

Favipiravir ensured that Glenmark witnessed the highest contribution from new products to MAT growth among peers.

The FabiFlu Effect Is Waning?

In the past few months, 22 companies have begun selling Favipiravir in India, pushing Glenmark’s market share lower, from 85-90% in September to 64% in October 2020. According to a Prabhudas Lilladher note, a further decline is expected as many new brands enter the market.

Favipiravir, the brokerage said, contributed 30.4 percentage points to sales growth in August 2020 which declined to 16.3 in October 2020.

The company’s management acknowledged that FabiFlu-led growth is slowing, but is optimistic on the overall prospects. "Our base is growing around 7% to 8%. For the balance of year, we expect FabiFlu to slow down. But we are also expecting our base to systematically improve,” Glenn Saldanha, chairman and managing director of the company, said in post-earnings call.

Glenmark Pharma’s FabiFlu  Booster Is Waning

As the FabiFlu effect wanes, Glenmark stock rally has also lost some steam, down 1% in the last month while the Nifty index was up 9%. However, year-to-date the share price is still up 35% versus a 47% gain in the Nifty Pharma index and a 7% rise in the benchmark.

"Glenmark which got strong support from FabiFlu growth on account of a surge in Covid incidence, will potentially see some downward pressure going forward as not only new entrants are carving share in the Favipravir category, but the potential opportunity might also decline as efforts around the development of vaccine have started to fructify", Vishal Manchanda, research analyst at Nirmal Bang Securities, told Bloomberg Quint.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.