Analysts Say Glenmark, Cipla’s Covid-19 Medicines To Benefit In Short Term, But…

Analysts expect the launch of two anti-viral drugs to treat Covid-19 patients to benefit Glenmark Pharmaceuticals Ltd. and Cipla Ltd. in short term but subside as competition increases.

Glenmark received the Indian drug regulator’s approval to manufacture and market a generic of Favipiravir for treating mild to moderate infection. A pack of 34 Favipiravir 200 mg tablets costs Rs 3,500, according to its exchange filing.

Cipla launched a generic of Remdesivir under brand name Cipremi to treat patients with severe symptoms. This comes as Gilead Sciences Inc. extended a voluntary non-exclusive licence to Cipla to manufacture and market the copy-cat version of its anti-viral drug. India, earlier this month, had approved the emergency use of Gilead’s Remdesivir.

Reacting to the drug launch, Glenmark shares surged as much as 40% on Monday, the biggest single-day jump on record, while those of Cipla rose nearly 9.5%.

“This is a short-term opportunity, nothing great to count on. Once there will be more competition, this will not be of much benefit,” Surajit Pal, pharma analyst at Prabhudas Lilladher, told BloombergQuint. “There are six other players developing Remdesivir, the likes of Hetero, Cadila, Jubilant lifeSciences, Strides Pharma. In case of Glenmark, there will be another two-three players entering. Remdesivir won’t contribute anything to the bottom line.”

Agreed Vishal Manchanda, analyst at Nirmal Bang Securities, as he said a total of six companies, including Jubilant lifeSciences, Cadila and Hetero, are developing Remdesvir. There will be more players for Glenmark’s drug as well.

“When a lot of players enter market, share gets diluted. When you have a treatment and faster recovery rate, the number of incidences will also reduce,” Manchanda told BloombergQuint. “We may also see new treatment coming up, which will add to the competition.”

Investec expects at least three to four companies to enter the market within the next 15-30 days for Favirapravir and five to six for Remdesivir following the Drug Controller General of India’s nod.

Doctors and companies across the world are racing to find treatments that can help patients survive the new coronavirus, which has so far killed more than 460,000 people worldwide and nearly 14,000 in India.

The domestic opportunity is unlikely to be meaningful for Glenmark and exports could generate significant upsides potentially, if things fall into place, according to IDFC Securities. “Since Glenmark is completely vertically integrated, it is likely to be fairly cost competitive and should be able to get reasonable market share in the FPV market even if it becomes competitive,” it said in a note. “Currently, Glenmark is among the few companies globally who have undertaken FPV clinical trials, which might be a competitive edge in securing regulatory approval in certain countries versus peers who have also developed the drug but haven’t undertaken trials like Strides and Hikal.”

According to Investec, while both approvals may be decent earners for the companies in India, it’s difficult to see sustainability of sales. “We don’t see the any of the brands crossing Rs 100 crore.”

IDFC Securities, however, said efficacy of the clinical trials will be a monitorable as data for this should be available in another month or so. “As has been the case with almost all proposed Covid-19 treatments, there continues to be differing opinions on FPV efficacy. Interim data from a large scale trial in Japan apparently wasn’t very positive.”

Last month, Glenmark had announced that it was conducting another clinical trial to evaluate the efficacy of two anti-virals Favipiravir and Umifenovir as a combination therapy in moderate hospitalised adult Covid-19 patients in India.