Tuesday, September 25, 2012

Impact of no Diovan Generics during first 180 days on Novartis and Ranbaxy


Since Diovan is a post MMA case, the 180 days exclusivity stands triggered with patent expiry and  Ranbaxy  with every passing day is losing some potential revenues. It is unlikely that Novartis would launch an authorized generic uniil Ranbaxy launches its generic version. If the delay on part of Ranbaxy is because of any technical hurdle (manufacturing constraint), the key question is whether Ranbaxy can sell its 180 days exclusivity.
Assuming Ranbaxy is not able to launch Diovan generics during the 180-days exclusivity, Novartis should be able to safeguard close to $200 million in revenues over the next quarter. This should translate into $100m in incremental profits for the fourth quarter this year. In EPS terms, the potential