More Pharma Companies Vie For Quetiapine (Seroquel)

After AstraZeneca’s patent for Quetiapine (Brand Seroquel) expired following the legal battle against the US drug regulator USFDA on Mar 26, 2012, it seems that more pharma companies are coming out with the generic of the product.

After a brief discussion with the one of the pharma companies, we understand that there is a shared exclusivity between a few companies. Even though it is not clear how many companies share the exclusivity, we believe that at least 4 companies from the Indian market have the exclusivity status. Two other drug makers, Mylan and Teva Pharmaceutical Industries, have already launched the product in USA. Among the domestic companies, Dr. Reddy's Labs (DRL), Lupin, Sun Pharma and Aurobindo Pharma have confirmed the USFDA approvals. In fact, DRL, Lupin and Sun Pharma have already launched the product. Aurobindo is expected to launch the product shortly.

Seroquel is an antipsychotic drug with Quetiapine as an active ingredient in it. It is used in the treatment of schizophrenia. Last year, AstraZeneca recorded Seroquel formulations sales of 4.6 billion in the US. The worldwide market for Seroquel products is about USD 5.83 billion.

With the entry of at least 7 players, we expect heavy dilution of the Seroquel market. The USD 4.6 billion market (about Rs 23000 crore) would also see a price erosion of about 70%, which will reduce the market size to USD 1.38 billion (Rs 6900 crore). With that, the market share of the innovator AstraZeneca may come down to about 14%, though this may take some time. In the early phase however, we expect AstraZeneca to retain the largest market share, since the other companies would take some time for the distribution and marketing-related activities.

We expect Teva, Mylan, DRL and Lupin to earn a market share of about 15-16% as they have completed their day 1 launch. Aurobindo and Sun Pharma’s launch comes 2 days after the patent expiry as well as after other companies have launched their version of the Seroquel, and hence, it may see higher competition after the launch. Overall, we believe that the Indian companies would end up making about Rs 400-500 crore each in their topline if no other competitor comes into the picture. The impact of this, however, would be effective from the next quarter.

On the BSE, the shares of Sun Pharma are trading 1% lower to its yesterday’s closing price. The shares of Lupin and DRL have risen marginally, while those of Aurobindo are up by 1.66%.