Motilal Oswal maintains ‘Purchase’ ranking on Cadila Healthcare, revised TP Rs 550


Revlimid is used to deal with a number of myeloma in adults. The drug is on the market as orally administered capsules. Patents on Revlimid expire on twenty seventh April, 2027.

Cadila (CDH) and Celgene (innovator) have reached an settlement to settle the litigation pertaining to g-Revlimid within the US. Assuming the phrases of the settlement by the innovator are just like that with different generic firms (restricted quantity gross sales over FY23–26E and limitless portions put up Jan’26), there may very well be a possible NPV addition of Rs 25 per share from this chance. We await additional readability on the settlement. We stay constructive on CDH on account of its robust ANDA pipeline (comprising injectables), NCE portfolio, and outperformance in DF. The vaccine alternative could also be a possible set off over the medium time period. We worth CDH at 22x (in step with its three-year common) 12M ahead earnings to reach at TP of Rs 550. Preserve ‘purchase’.

CDH and Celgene (wholly owned subsidiary of BMS) reached an settlement pertaining to patents for Revlimid. Each events would file consent judgements with the USA District Courtroom for the District of New Jersey enjoining CDH from advertising and marketing g-Revlimid earlier than the expiration of the patent-in-suit, besides as offered for within the settlement.

The innovator had settled circumstances with NTCPH, Alvogen, DRRD, and CIPLA on Revlimid beforehand. As per the settlement with NTCPH, it’s allowed to promote mid- to single-digit quantity share of Revlimid offered within the US within the first 12 months of entry. The amount share allowed would steadily rise every year as much as Mar’25 – from when it has permission to promote as much as one-third of the whole quantity share of Revlimid offered within the US.

Alvogen, DRRD, and Cipla have additionally reached an settlement with the innovator on g-Revlimid, whereby they’d be licensed to promote restricted volumes of g-Revlimid on a confidential date after Mar’22. They’re licensed to promote with out quantity limitations from Jan’26. We imagine the settlement with CDH can also be on related strains.

SUNP, LPC, ARBP, Mylan, Apotex, and Hetero Medication are different firms presently in patent challenges with the innovator on Revlimid. Revlimid is used to deal with a number of myeloma in adults. The drug is on the market as orally administered capsules. Patents on Revlimid expire on twenty seventh April, 2027. Revlimid’s CY20 gross sales within the US have been up 12% y-o-y to $8.2b.

We count on a 19% earnings CAGR over FY20–23 on the again of a) a 5% gross sales CAGR within the US v/s virtually flat US gross sales over FY18–20), b) an 11% gross sales CAGR in DF v/s modest development over FY18–20, and c) a 20% gross sales CAGR in EM – supported by 230bp margin growth and diminished monetary leverage. We worth CDH at 22x (in step with its three-year common) 12M ahead earnings to reach at TP of Rs 550. Preserve ‘purchase’.

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