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Torrent Pharmaceutical’s acquisition of Unichem’s branded generics portfolio may have boosted the firm’s domestic market performance, however, there are some low-growth areas for the Ahmedabad-headquartered firm to work on. According to market data, a key anti-hypertension molecule that came in through the acquisition is in low-growth trajectory as the domestic market has shifted to newer molecules.
Losartan, an anti-hypertension drug, in which Unichem enjoyed around 37-38 per cent market share, has hardly seen any growth in the past five years. In June, there was a decline of 3.6 per cent in the overall market value for the drug, according to the data sourced from market research firm AIOCD AWACS.
Losartan, an early generation anti-hypertension drug, accounts for nearly 20 per cent of the acquired portfolio.
Edelweiss has noted the anti-hypertension market has shifted towards another molecule, Telmisartan, which is considered more efficacious. Torrent’s competitors such as Sun Pharmaceuticals and Mankind Pharma have also seen decline in growth in Losartan and have shifted focus to their respective Telmisartan brands.
Torrent Pharma already has presence in Telmisartan, with a revenue of Rs 260 million, which is a small share of the overall Rs 21.41 billion market. Through the acquisition, Unichem’s Telmisartan brands have also come to Torrent.
“Given that the overall anti-hypertensive market is growing at a CAGR of 11 per cent, Losartan will in fact be a key contributor to our anti-hypertension portfolio. Losartan continues to have highest number of approval across various indications among the Angiotensin II receptor blockers (ARBs). Leveraging this will facilitate significant market share expansion opportunities for Losartan,” said a Torrent Pharma spokesperson.
Amey Chalke, analyst with HDFC Securities, said this was indeed a low-growth area and a sizeable portion of the acquired portfolio was Losartan. “Torrent, however, is trying to build on the synergies of physician contacts, distribution channels, cost of manufacturing and grow the drug sales,” he said.
Edelweiss, however, said Torrent had indicated that it was confident of growing the category by at least 10 per cent. Torrent thinks that Losartan is a good fit as it plugs a gap in its anti-hypertensive portfolio, as it is the preferred drug in the diuretic hypertensive market, which is 25 per cent of the overall hypertension market. The company spokesperson said, “A positive trend is already visible as Losartan delivered 12 per cent growth for the current quarter. We are confident that Torrent’s core strength of brand building, coupled with cost synergies, should continue to positively impact the acquired portfolio.”
In 2017-18, Torrent clocked a revenue of aboutRs 60 billion, up 3 per cent year on year, despite 19 per cent growth in the domestic market. “Excluding benefits from the acquisition, domestic growth came in at 8 per cent. During FY18, Torrent completed the acquisition of Unichem's branded business, which contributed about Rs 1.8 billion or 3 per cent to the total revenue," Edelweiss said.
