Covid drugs rescue earnings of pharma companies in Q11 min read . Updated: 14 Aug 2020, 06:26 AM IST
Analysts say there will be greater uncertainty about revenue from favipiravir due to companies going for a pricing war
Pharmaceutical companies with covid-19 drugs in their portfolios reported some of the best earnings in the June quarter, even as the overall medicine market was down as the lockdown disrupted services at hospital out-patient departments and elective surgeries.
“All those who had some covid drugs did well, and those who had HCQ in their portfolio did extraordinarily well. Ipca was the biggest gainer. They posted almost four-fold profit from HCQ. Alembic is India’s largest manufacturer of azithromycin. Their exports went up significantly, and part of it helped their earnings," said Vishal Manchanda, an analyst with Nirmal Bang Institutional Equities.
In Q1, the biggest gainers were those having hydroxychloroquine and azithromycin in their portfolios.
Ipca Laboratories reported over three-fold jump in consolidated net profit, with its topline growing 41% to ₹1,546 crore. In contrast, total sales in the Indian pharma market were down 6% to ₹31,838 crore in the quarter, driven by a fall in demand for therapy drugs, shows data by market research firm AIOCD-AWACS.
Ipca managing director A.K. Jain in a conference call said it garnered ₹259 crore in additional domestic and export sales of chloroquine and the safer derivative HCQ.
Zydus Cadila, one of the largest suppliers of HCQ, saw its US sales grow 19%, but analysts said the gains were lower than expected in April-June due to higher sales in March.
Alembic Pharmaceuticals’ consolidated net profit soared over two-fold to ₹301 crore, with stellar revenue growth in formulation and API sales.
In July-September, the revenue growth is expected to be primarily in favipiravir, especially as cases of covid-19 continue to surge globally.
However, analysts say there will be greater uncertainty about revenue from favipiravir due to the pricing war. Currently, there are more than half-a-dozen companies that have launched favipiravir, with prices varying between Sun Pharma’s ₹35 to Glenmark’s ₹75.