FDA new drug approval run rate down in FY20 for most Indian pharma majors

According to analysts, companies are skeptical about entering crowded opportunities

Indian drugmakers have been careful in filing new drug applications with the US regulator. New application submissions as well as withdrawal of filed applications continue as companies focus on rationalising their approach to launching drugs in the US market and choose to focus on comparatively high margin products.

A quick look at the number of abbreviated new drug applications (ANDAs) approvals received by key Indian drug makers from the US Food and Drug Administration  (USFDA) shows that in FY20, most companies have seen a decline in the number of approvals compared to the previous year.

For example, Aurobindo, the Hyderabad based export focussed drug major, got 16 ANDA approvals in FY20 compared to 49 in FY19. Aurobindo has been working on differentiated products in oncology, hormones, enzymes, vaccines and biosimilars. It has readied its launch pipeline and analysts now expect it to monetise the pipeline. Cadila Healthcare got 35 ANDA approvals in FY20 compared to 77 in FY19, Cipla got 14 approvals in FY20 compared to 32 in the previous year. Glenmark too got 14 approvals in FY20 almost half of what it had it FY19 while Torrent got only 3 approvals in FY20 compared to 20 in FY19.

Sun Pharma saw a sharp rise in ANDA approvals though, from 37 in FY19 to 45 in FY20. The company has invested $2 bn in its specialty portfolio in the US. It has also guided that research and development (R&D) costs would rise to 8-9 per cent of sales over a period of time. In the fourth quarter of the fiscal, it was 6.1 per cent of sales.

Analysts feel that Indian companies have not only decided to focus on high margin, low competition products, but many plants were also under the the FDA scanner in the last one year or so. This resulted in a slight slowdown in the rate of approvals for some players. We have created our launch pipeline and the last two years saw a slew of filings and approvals. The lower run rate in FY20 is because of that. And going forward we would be selective in our approach when it comes to filing for products, said a senior official of a leading US focussed company.

CLSA analyst Arun Dalal pointed out in a recent report that ANDA withdrawals have continued as companies are skepctical about entering crowded opportunities. This is why ANDA submissions remain on track to decline for a third consecutive year, CLSA noted.

USFDA ANDA Approvals

Company	FY20	FY19
Alembic	31	15
Alkem	23	21
Aurobindo	16	49
Cipla	35	77
Cadila Healthcare	14	32
DRL	21	20
Glenmark	14	25
Lupin	15	33
Sun Pharma	45	37
Torrent Pharma	3	20
Wockhardt	2	2

 
Source: Edelweiss

ANDA Submissions to USFDA

FY16	852
FY17	1306
FY18	1044
FY19	909
6MFY20	467

Source: CLSA

ANDA Withdrawals with USFDA 

FY16	248
FY17	214
FY18	606
FY19	388
5MFY20	139

Source: CLSA