CITI: See 50% upside to Aurobindo Pharma. Target 1120
Good News Continues, Supports Re-rating Thesis — gEntecavir is ARBN’s 15th
approval in FY16. If this pace continues, revenues could ramp up meaningfully over the next few years. We remain comfortable with our above-consensus estimates and maintain ARBN as our top pick.
gEntecavir — Another Meaningful Opportunity - We expect gEntecavir (US$285m market) to be a potentially chunky & sustainable product for Aurobindo. It is only the third generic company (after Teva & Par) to get approval for this product and we do not see too many additional competitors in the near future. This should keep price erosion & profitability at attractive levels. Assuming c25-30% price erosion and 15-20% MS, this could be another cUS$30-40m product (and a highly profitable one) for the company.
Other Interesting Approvals — The following other recent approvals hold good
potential in our view (mkt size, no. of players): gSuprax (US$80m, one), gZithromax (US$135m, two), gDilantin (US$125m, three). gComtan (US$59m, four).
Good News Continues, Supports Re-rating Thesis — gEntecavir is ARBN’s 15th
approval in FY16. If this pace continues, revenues could ramp up meaningfully over the next few years. We remain comfortable with our above-consensus estimates and maintain ARBN as our top pick.
gEntecavir — Another Meaningful Opportunity - We expect gEntecavir (US$285m market) to be a potentially chunky & sustainable product for Aurobindo. It is only the third generic company (after Teva & Par) to get approval for this product and we do not see too many additional competitors in the near future. This should keep price erosion & profitability at attractive levels. Assuming c25-30% price erosion and 15-20% MS, this could be another cUS$30-40m product (and a highly profitable one) for the company.
Other Interesting Approvals — The following other recent approvals hold good
potential in our view (mkt size, no. of players): gSuprax (US$80m, one), gZithromax (US$135m, two), gDilantin (US$125m, three). gComtan (US$59m, four).
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