Healthcare Sector Update - Reduced COVID-19 cases affect IPM growth YoY; Non-COVID therapies in revival mode By Motilal Oswal
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Reduced COVID-19 cases affect IPM growth YoY; Non-COVID therapies in revival mode
In Sep’21, YoY growth remains healthy, but moderates on a monthly basis
* IPM growth stood at 12.4% YoY in Sep’21 v/s 17.7 % YoY in Aug’21.
* Respiratory/Analgesics/Gynecological exhibited a growth of 45.8%/28.1%/17.3% YoY.
* Respiratory sales grew on a sequential basis, with 45.8% YoY growth in Sep’21 (38.2% YoY growth in Aug’21).
* At the Therapy level, YoY growth was dragged by Cardiac (+2.7% YoY), Diabetes (+6.8% YoY), and VMNs (+2.4% YoY).
For the quarter-ended Sep’21:
IPM growth was spread across price/volume
* For the quarter-ended Sep’21, YoY growth stood at 14.6% YoY.
* Volume/price growth of 6.3%/5.8% YoY was supported by moderate (2.5% YoY) growth in new products.
Indoco/Ipca/Wockhardt/Dr. Reddy’s outperform in Sep’21
* Among the top 30 corporates, Indoco Remedies (+36.7% YoY), Ipca Laboratories (+34.9% YoY), Wockhardt (+31% YoY), Mankind Pharma (+26.2% YoY), and Dr. Reddy’s Laboratories (+19.8% YoY) grew notably higher than IPM. With a reduction in the number of COVID-19 cases, Glenmark Pharmaceuticals’ sales declined by 19% YoY in Sep’21.
* Ipca posted a strong offtake in Pain products (Zerodol franchise, ~32% of sales), which grew 42% YoY.
* Dr. Reddy’s growth was supported by the Respiratory segment (~11% of sales), growing at 57% YoY.
* Ajanta Pharma saw double-digit growth across most top therapies, driving overall YoY growth.
* Cadila Healthcare and Cipla showed lower-than-industry growth in Sep’21 (+7.6%/+5.4% YoY) v/s +11.9%/+12.6% YoY in Aug’21.
* On a MAT basis, Ipca/Merck India/Alkem Laboratories/Ajanta reported leading volume growth (+16.8%/+16.2%/+11.8%/+11.3% YoY). Glenmark posted the highest growth in new launches (+21.4% YoY).
On a MAT basis, Anti-Infectives, Gastrointestinal, VMN, and Pain/Analgesics drive YoY growth for the 12-months ending Sep’21
* On a MAT basis, industry growth stood at 15.2% YoY.
* Anti-Infectives/Gastrointestinal/VMN grew by 26.7%/21%/20.1% YoY.
* Vaccines sales declined by 3.8% YoY, impacting overall growth
* While Respiratory posted strong YoY growth in May-Sep’21, it remained a drag on YoY growth on a MAT basis.
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