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Generic Lotrel launched in the US

* Lupin receives approval for generic of Lotrel: After some delay, Lupin
today announced approval for its generic version of Novartis’s Lotrel
(amlodipine + benazepril combination) indicated for treatment of
hypertension. Lupin is the third player in this market after Teva and
Sandoz (AG). The current approval is for four dosage strengths (2.5mg/10mg,
5mg/10mg, 5mg/20mg and 10mg/20mg). The company has immediately started
shipping the product.
Lotrel brand MAT Sep-09 sales as per company are c. $1.1bn. The higher
dosage strengths (5mg/40mg and 10mg/40mg) making up c.30% of total sales
are yet to go generic.

* Lupin’s launch will be without any legal risk: Lupin was sued in Dec-06
for its ANDA seeking approval to market all the six strengths of Lotrel.
However, the company settled with the innovator in Sep-09 for a launch
ahead of expiry in 2017 of the only listed patent - 6162802. The terms of
the agreement were confidential. Teva had already launched “at-risk” in
2007 following which Novartis introduced its authorized generic under
Sandoz. Dr Reddy’s, Mylan, Cobalt, Watson and Par Pharma were also sued.
Post Lupin’s launch, we believe two more players are likely to enter in
next six-nine months.

* We have built in $15m Lotrel sales in FY10: In 4QFY10, we have already
factored in $15m sales from this product @95%, assuming 15% share of a
$400m market (20% price erosion from current level). While the IMS reports
higher sales, we note that IMS tends to over-report sales of generic
products. We have also factored in $25m sales for FY11, assuming 25% share
of a $100m market (80% price erosion from current level). We note that
Lupin is also likely to launch higher strengths of Lotrel in June-11 - post
expiration of Par’s 6-mth exclusivity, as per the latter’s settlement with
Novartis. We expect Teva/Mylan/Cobalt to launch simultaneously. Hence, the
benefits will be restricted to $5m.

* We remain optimistic about Lupin’s generic portfolio pipeline for US and
maintain our estimates. With clearance of Mandideep facility, we expect
some awaited approvals to come through in FY11. Maintain BUY.

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