Covid drugs all set to boost pharma firms’ Q1 revenues
PremiumA surge in demand has prompted drugmakers to scale up capacity and launch new products
NEW DELHI : Drug sales that fell as India’s first pandemic wave ebbed in the March quarter are expected to rebound in the June quarter, as the havoc from the second wave boosted demand for covid drugs in April and May.
Top drugmakers such as Cipla, Dr Reddy’s Laboratories and Zydus Cadila, which have some of the largest portfolios of covid-19 drugs in the country, saw their March quarter sales decline 7-19% from the preceding quarter.
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“Our India business recorded sales of ₹845 crore with a year-on-year growth of 23% and a sequential decline of 12%. The sequential decline was driven by reduced demand for covid drugs during this quarter as infections remain low, and seasonal impact in our portfolio," Dr Reddy’s chief executive officer Erez Israeli said in an investor conference call earlier this month, after the company’s earnings release.
Cipla’s sales decline was the sharpest at 19%, as it has India’s largest portfolio of covid-19 drugs, including remdesivir, favipiravir and an exclusive licence to market Roche’s tocilizumab in the country.
However, the June quarter has been a different story. India recorded 15 million new cases of covid-19 in April and May alone, much higher than the cumulative 12 million confirmed by 31 March. This led to acute shortages of medicines like remdesivir, favipiravir, tocilizumab and even common medicines like dexamethasone in some places.
The uptick in demand bodes well for pharmaceutical companies.
“We are observing strong demand across the covid portfolio, which will reflect in our Q1 (April-June) numbers," Cipla chief executive officer Umang Vohra said in an investor conference call earlier this month.
The surge in demand has prompted all pharmaceutical companies to scale up capacity and launch new products. Cipla has launched an antibody cocktail of casirivimab and imdevimab, again through an exclusive distribution licence in India with Roche Pharma India. The drug, priced at ₹60,000 per dose, is used to treat mild-to-moderate covid-19 in patients who are at high risk of progressing to severe covid-19.
The company is also one of India’s largest manufacturers of respiratory drugs, and unlike the first wave, now also expects to see strong demand for its inhalation product Budecort—a brand of the corticosteroid budesonide that is prescribed by doctors to mild covid-19 patients following research that showed benefits.
For Dr Reddy’s, this month has also seen the launch of Sputnik V vaccine, for which it has exclusive licence from Russian Direct Investment Fund to distribute 250 million doses in India. While revenue from the vaccine sales will show up in the current quarter, capacity expansion is expected only in the following quarters.
Zydus Cadila too may see the launch of its own vaccine ZyCoV-D by June or early next quarter, provided its efficacy data is above the cut-off of 50%.
The company’s management on Thursday said it expects to have 158 covid-19 cases in its phase 3 trial in the coming weeks to determine the efficacy of its vaccine.
Indian pharmaceutical companies are also coming up with newer covid-19 drugs like Eli Lilly’s baricitinib and Merck’s yet-to-be approved mild covid-treating drug molnupiravir.
Besides these three, two other giants—Sun Pharmaceutical Industries and Lupin—are also betting big on covid-19 drugs baricitinib and molnupiravir, after missing out on the first wave.
India’s largest drugmaker, Sun Pharmaceutical Industries, launched products like remdesivir, favipiravir and itolizumab late in the first wave, and the portfolio was unable to generate significant revenues for the company in the previous financial year. But now, it is also entering the fray with molnupiravir, baricitinib and itolizumab through partnerships with their makers.
“In the second wave from March and April, the number of cases has increased, so we will get some short-term benefit in this next financial year. But at the same time, we have a good number of covid portfolio products with us which are being used off label, and they are doing well in coming quarters," Kirti Ganorkar, Sun Pharmaceutical Industries’ head of India business, said in the company’s investor conference call on Thursday.
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