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Third consecutive month of healthy growth steered by price hikes 

In Aug’22 the IPM grew 12.1% y/y, majorly led by price hikes (6.6%), while volumes grew steady (4%), with slight growth in product launches (1.5%). The base month Jul’21 had no major impact from covid, with majority of all the therapies returning to normal. On a MAT basis, IPM continues to grow at 6.3% (past 3 months growth has been steady at ~6- 7%), was driven by price rise (5.6%) and launches (1.6%) whereas the volumes declined 0.8%. Barring anti malarials and anti infectives therapies, all other therapies grew in double digits, Respiratory (19%), Neuro / CNS (15%), Cardiac (15%) form ~26% of the IPM. GI and derma therapies (form 19% of IPM) grew over 13%. Chronic and sub-chronic therapies grew 13.9 and 13.6% respectively, while acute therapies grew 10% in Aug’22. MNCs such as Merck, AstraZeneca and GSK and once again outperformed IPM (14%-60%), domestically, Natco (27%), Biocon (23% each) and Glenmark (22.5%) grew highest.

Except Ipca, all companies grew healthy in Aug’22. Most domestic companies grew in double digits, Natco 26.8%, Piramal HC 24%, Biocon and Glenmark (22-23%). Eris, Torrent Pharma and Sun+Ranbaxy grew at 18-20%. Ipca was the only company which saw a decline (6.9%).

Merck, GSK and AstraZeneca remain consistent outperformers. MNCs such as Merck (59.7%), AztraZeneca (17.2%), Abbott+Novo Nordisk (14.3%), P&G Health (14.9%) and GSK (13.8%) outperformed the IPM. Novartis and Pfizer declined 4.5% and 1.4% respectively

Most therapies reported double digit growth. Key therapies such as Respiratory (forms 8% of IPM) grew 19%, Cardiac (13% of IPM) grew at 15%. Other therapies that grew in the range of 13-14% were GI and Derma (form 19% of the IPM). Chronic and sub-chronic therapies (form 53% of the IPM) grew 13.9 and 13.6% respectively, while acute therapies grew 10% in Aug’22.

Recently generic Sitagliptin, plateaued in the second month of launch. Post Merck’s Januvia patent expiry in Jul’22, over ~25+ manufacturers launched over 30 brands, making this a highly competitive market. Sulphonylureas (form 70% of the oral anti-diabetes market) have started to show a downward trend in the past few months. Even as DPP4 plains and combinations have shown a steady trend, Sitagliptin has grabbed some market share from Teneligliptin and Vildagliptin, while Sitagliptin + Metformin seems to have plateaued in the second month. Good pick in the SGLT2 + DPP4 was mainly attributable to pick up in Dapagliflozin + Vildagliptin. This kind of strong pick-up wasn’t replicated for Dapagliflozin + Sitagliptin.

Our view. We believe majority of the therapies have picked up pace as Covid 19 is now past. Footfalls in dermatology, stomatology, ophthalmology, neurology and gynaecology have started to pick up. We maintain our positive view on chronic focused companies like Ajanta, JB Chemicals, Eris and Torrent Pharma.

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