Thursday, March 31, 2011

Morepen Laboratories – Major API opportunities on the anvil – A potential mulitbagger

Morepen holds DMF approval for some very important active ingredients that are set to expire over the next two years. Post patent expiry, the volume sales of  API’ tend to go up by as much as 100% from pre expiry levels. 
Morepen has filed DMF’s for Actos (pioglitazone), Lipitor (atorvastatin), Singulair (monteleukast sodium). Atorvastatin patent will expire in June 2011, pioglitazone patent will expire in August 2012, and montleukast sodium will also expire sometime in 2012. The current API sales for atorvastatin, pioglitazone and monteleukast sodium is close to $ 250m, $100m and $125m respectively.   Assuming a 5% market share for Morepen, the approximate incremental sales, that it would be able to realize from these opportunities could be as high as INR 120-150 crores, depending upon  price negotiations with ANDA filers. 25% post tax profits from these sales, would be a fair expectation.