Glenmark Receives ANDA Approval For Generics In Contraceptive Segment

Mumbai-based Glenmark Pharma has received another approval for a generic drug in the contraceptive segment. This approval is the fourth of its kind after the company issued a nationwide consumer level voluntary recall of seven lots of its contraceptive drugs Norgestimate and Ethinyl Estradiol. 

The new ANDA approval is for the same molecule i.e. Norgestimate and Ethinyl Estradiol but in different strength i.e. 0.25 mg / 0.035 mg. This will be a generic of the ‘Ortho Cyclen’ tablets manufactured by Janssen Pharmaceuticals. The total market for this product in the US is USD 88 million as per data provided by IMS Health. Norgestimate and Ethinyl Estradiol are indicated for pregnancy prevention through the oral route.

Oral contraception is a popular method of contraception in the US. It is estimated that there are 62 million women in their child-bearing years (15-44 years) of which about 28 per cent of women practice contraception. Glenmark’s four recent ANDA approvals have total yearly sales of about USD 440 million. We are not sure how many competitors are there in this market but Watson Pharma and Teva Pharma are the two giant US pharma companies active in the contraceptive segment. 

There also are some innovator companies in the market. Glenmark is a market leader among the Indian pharma companies active in the contraceptive segment in the US. The total market for contraceptive drugs in the US is estimated to be about USD 4.5 billion. It is also one of the fastest growing therapeutic segments in the US. 

Table 1 Last 3 ANDA Approvals

Glenmark currently has a portfolio of 79 authorised generics for sale in the US. It has also filed 39 ANDAs with the USFDA. The new ANDA approval is the 10th in the female contraception segment. It is not clear when this product will be launched but as we see with many generics, price erosion will also be seen with the split of the market between the companies. We expect the company to make about Rs 50-70 crore from the sale of this one product which will be 2 per cent of its annual sales. Considering its pipeline, the contraceptive segment appears to hold a lot of scope.

The company for the nine months of this fiscal has reported 37 per cent growth in its topline to Rs 2,955 crore. The bottomline during this period has, however, declined by 9 per cent to Rs 312 crore. The loss mainly occurred in the last quarter due to the sharp rupee depreciation. With the rupee still under stress, profits may remain muted even in this quarter.

On an YTD basis the shares have gained 5 per cent. The company has witnessed double-digit growth in all its business segments across all the geographical territories. In the US the growth rate was a grand 56 per cent in the last quarter. In the European markets the sales jumped by 48 per cent while those in India grew by 11 per cent. We believe that Glenmark would provide good growth opportunity for the investors, especially during the current volatile environment.