Lotrel Approval – Good For Lupin

Lupin has received FDA approval for four strengths of generic Lotrel (amlodipine and benazepril combination). Lotrel, a Novartis product, is protected by one OB listed patent – ‘802, expiry in Dec’17. At that time, the Lotrel market size was roughly $1.4 bln.

Generic Lotrel is clearly a lucrative product for Lupin, where the upside will depend on the timing of launches by other players. For Lupin Labs, Morgan Analyst assumes $40 mln sales for Lupin in F11 (based on a five player market, 85% price erosion, and 20% market share) in our model. However, until additional competition steps in (Mar 10 onwards), this could well be $15-20 mln monthly sales opportunity with high margins.

Morgan expects Lupin to report an EPS of Rs 76 for FY10 and Rs 96 for FY11 with a Overweight rating on Lupin in view of good earnings visibility, near-term product catalysts (management expects 2-3 launches in F11 with $500 mln addressable market)