Published on 18/09/2020 10:28:10 AM | Source: Motilal Oswal Financial Services Ltd

Pharmaceutical Sector Update - IPM declines in Aug’20 after posting muted growth in Jul`20 By Motilal Oswal

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IPM declines in Aug’20 after posting muted growth in Jul’20

* The Indian Pharma market (IPM) declined by 2.2% YoY in Aug’20 (v/s muted growth of 0.2% YoY in Jul’20). The volume decline of 9.2% YoY dragged the IPM’s performance, which was offset by growth in (a) prices by 4.4% YoY, and (b) new launches by 2.5% YoY to some extent.

* Therapy-wise in Aug’20, Anti-Infective/Respiratory/Anti-Malaria declined 11%/12.4%/19.6% YoY, while Cardiac/VMN/Anti-Diabetic grew 11.5%/6.2%/1.6% YoY.

* For the quarter ending Aug’20, the IPM’s growth was subdued at 0.2%YoY. Volumes declined 6.6% YoY, prices grew 4.6% YoY and growth in new products was up 2.2% YoY. NLEM products grew 0.8% YoY while growth in Non-NLEM products were muted YoY.

* On MAT basis, industry growth came in at 4.1% YoY.


Volume decline dents overall IPM growth

* In value terms, secondary sales dipped 1.3% YoY for NLEM (~16% of IPM) while sales for Non-NLEM (~84% of IPM) declined 2.4% YoY in Aug’20.

* While price growth for non-NLEM products was 4.5% YoY, volumes declined by 10% YoY. NLEM products posted volume decline of 1.7% YoY.


Glenmark, JB Chemicals and Ipca remain outperformers

* In Aug’20, Glenmark (+31.6% YoY), JB Chemicals (+10.7% YoY) and Ipca (+9.8% YoY) delivered highest growth.

* Glenmark witnessed growth of 1.8x YoY in the Anti-infective segment, mainly due to Fabiflu (COVID drug) sales. JB Chemicals grew due to strong uptake in Cardiac therapy (50.9% of therapy mix), which grew 18.3% YoY. Ipca witnessed good traction in Pain/Analgesics (+22.5% YoY) and Cardiac (+16% YoY).

* Sun Pharma’s sales were down 5% YoY (v/s decline of 3.2% YoY in Jul’20), mainly dragged by the Anti-Infective segment (-23.3% YoY) and Gastro (-10.9% YoY).

* FDC/Natco exhibited largest YoY decline of 12.5%/22% in Aug’20.

* On MAT basis, JB Chemicals/Torrent reported highest price growth of 10%/7.7% YoY. Glenmark saw highest growth in new launches (+9.8% YoY).


Pain, Anti-Infective and Gynecology drag overall sales

* Cardiac/ Anti-Diabetic/Respiratory sales grew 11.6%/ 8.4%/ 7.9% YoY on MAT basis in Aug’20. Pain/ Anti-Infective/Gynecology sales growth at 0.4%/ 0.1%/- 1.4% YoY adversely impacted growth on MAT basis in Aug’20.


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