Why cold wave across US is good news for Indian drug cos

Companies such as Cadila Healthcare, Lupin, and Natco, which sell generic versions of flu medication in the US market, are likely to benefit.

The cold wave in the US may bring big business for domestic pharma firms.

The cold conditions there have resulted in spike in flu cases.

Companies such as oCadila Healthcare, Lupin, and Natco, which sell generic versions of flu medication (Oseltamivir) in the US market, are likely to benefit.

The flu medicine market doubled in 2017-18 from the 2016-17 levels.

According to data from the US Center for Disease Control and Prevention, there have been 20.4 million to 23.6 million flu illnesses in the US between October 1, 2018, and February 23, 2019.

This caused 16,400 to 26,700 deaths there.

Natco, which launched its generic version of Tamiflu in the US in December 2016, reported a decline in the drug's sales in recent times.

After the third quarter results, Natco indicated that the decline in profits during the quarter was mainly due to margin reduction in its product Oseltamivir in the US.

Tamiflu is a Roche brand. Its capsule version (an estimated $500-million market) has seven generics and the suspension (an estimated $250-million market) has four generics.

Lupin chief executive Officer Vinita Gupta, who oversees the company’s US operations, had also indicated in an investors’ call after declaring the Q3 results that the flu season had been light through December.

"The flu season has been very light through December. It has picked up only in the last couple of weeks.

"So, we have seen some pick up in products like also Oseltamivir," she had said.

However, analysts now feel that the flu season this year is going to be in line with that of 2016-17, albeit a little delayed. Deepak Malik, an analyst with Edelweiss, said, “Flu season of 2016-17 was a $750-million market, and that almost doubled in 2017-18.”

He said companies such as Cadila, Lupin and Natco stand to benefit.

Sales of generic Tamiflu picked up during January and continued to sell in good numbers through February, plateauing in the last week or so, reports showed.

A senior executive of a drug company, which sells the drug in the US, said that despite the season picking up, sales of Tamiflu would not be as strong as it was in 2017-18.

“It is good news in terms of sales of the drug. However, it would not attain the levels of 2017-18. As of now, there is also no major shortage of the drug in the US,” he said.

In the suspension segment, Natco holds 33 per cent share, Cadila and Lupin each hold around 25 per cent each.

In capsules, Cadila holds 26 per cent, Lupin and Natco hold around 13 per cent each.

Photograph: Srdjan Zivulovic/Reuters