Ranbaxy Launches Generic Of Atorvastatin In Australia

Atorvastatin is the most prescribed drug in Australia and has a market potential of about USD 680 million (about Rs 3,366 crore). Ranbaxy is the first company to launch the generic Atorvastatin in the Australian market and has exclusivity in Trovas for a few months. With this exclusivity, Ranbaxy will be able to cut the competition in the generics market and get the benefit for some time ahead.

According to its 2010 annual report, Ranbaxy Australia recorded a sale of Rs 17.7 crore and a loss of Rs 10 crore. With the launch of this drug, Ranbaxy may gain some market share initially but the same will drop once the exclusivity ends. In order to show a significant boost in the topline from the sale of Trovas, we believe that the company needs to gain 40-50 per cent market share as quickly as possible. Besides, the Australian pharma market isn’t as big as that of the US and hence the earnings from Trovas would not have a very big impact on its profit and loss account.

Ranbaxy has already launched Atorvastatin in the US where it has gained market share of about 2.5 per cent according to recent reports. The market for Atorvastatin in the US is over USD 10 billion and Ranbaxy expects to collect revenues of about USD 500-600 million until May 2012. The company, however, may see its profits gone as it is in a settlement process with the USFDA over the issue of irregularities that were found in two of its plants in 2008. The company has made a provision of USD 500 million (about Rs 2,500 crore) which, when it gets realised, will eat into its annual profits.

From the launch of the generic Lipitor, the scrip has lost about 5 per cent in value indicating that investors are not bullish on the scrip. Its December quarter as well as 2010 year annual results will be announced tomorrow i.e. February 23, 2012. The vital comments by the management will provide cues over its progress in the year 2012. We shall update our readers on the same shortly.