CLSA highlights that it was a muted month for pharma companies as November sales disappoint for the Domestic Market. CLSA says it was a strong month for IPCA Labs; gains from integration of acquired brands for Dr Reddy. Falling active cases meant sales of Covid treatment drugs moderated for Glenmark / Cipla (+16%/-24% MoM). Glenmark saw the highest growth in its coverage in November, but excluding these products, its portfolio fell 1% YoY. Cipla’s core growth was a smaller 5.9% YoY.
IPCA’s growth was driven by strong double-digit growth in its pain, cardiac, and antidiabetic and derma portfolio. Anti-malarial product sales continued their decline. While Dr Reddy’s numbers are not strictly comparable, gains from integration of brands/ field force of Wockhardt are visible in strong growth for acquired brands (20-40% YoY). Weak growth in their tail brands was a drag for Sun Pharma, Cadila Healthcare, as well as Torrent Pharma. Lupin saw a small YoY decline as most of its acute products saw notable YoY falls in sales.
India’s pharma market (IPM) grew a tepid 1.1% YoY in November 2020, albeit on a high base. This muted growth meant TTM (trailing twelve months) slipped by 1.3ppts to 4.2% YoY as at Nov 20. Growth decelerated in the acute and chronic segments. Acute segment growth was flat YoY as 11.9%/4.6% YoY declines in anti-infective/pain segments were offset by 6.0%/2.8% YoY growth in vitamins/gastro. Chronic therapy grew just 2.9% YoY, but growth in the key cardiac/diabetes segments remained stronger at 8.5%/4.0% YoY.
On a TTM basis, acute segment growth stood at 1.7% YoY with anti-infective (-7.5% YoY) and gynaecology (-0.9% YoY) the main drags. Respiratory (+4.9%) and vitamins (+7.4% YoY) are the only therapies growing ahead of industry on a TTM basis. Chronic segment growth on a TTM basis slowed to 8.7% YoY, but within this cardiac and anti-diabetic segment sales both remained robust, rising 13.2%/9.6% YoY. Pricing has driven all of the growth for the industry. Gains from new launches have been fully negated by weak volume growth (down 3.5ppts) due to a lack of new prescriptions.
Top brands remain key drivers of growth:
Thyronorm (Abbott India) and Shelcal (Torrent Pharma) became the 16th/23rd-largest brands, while Dr Reddy’s (helped by acquisition) moved up one to become the 11th-largest company in IPM. The top brands continue to support growth: the top 10/25 brands of key domestic players saw 4-36% YoY TTM growth as of November. Despite recent restructuring, there has not been revival in growth across 11-25 as well as its tail brands for Cadila Healthcare.
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