Thursday, July 28, 2011

Ranbaxy to launch Crestor generics in Canada by 2012 - A potential $70m upside in Net income in 2012, while other FTF opportunities remain intact

Ranbaxy and Mylan will be launching Crestor generics  in canada in 2012. Crestor sales in Canada is approximately $350m. Assuming Ranbaxy and Mylan are able to grab upto 80% market share with a 40% price discount, the launch will yield upto $140m in net profits for the two companies. ($70m each).. 2012 should be a golden year for Ranbaxy as there are many other mutlibillion dollar opportunities, where it has a FTF status.  Ranbaxy is a great buy at current levels. The 2012 EPS numbers is expected to more than quadruple, by virtue of  FTF opportunites in Actos($3b), Provigil ($1b), Solodyn, Lipitor($11b), Diovan($5b), Crestor ($350m - limited competition). The cumulative branded sales for these drugs is close to $15b. Assuming a 40% erosion in market size and a 30% market share for Ranbaxy(authorised generics take away 50% of market share), these drugs should fetch Ranbaxy annual sales of more than $1billion. The average profitbaility of the sales should be 55% and the resulting EPS impact would to Rs 75per share.