According to sources, multinational American drug maker Gilead Sciences is set to join hands with at least 5 Indian generic pharmaceutical companies and allow them to manufacture and sell cheaper versions of its new hepatitis C medicines - sofosbuvir and ledipasvir - in 90 countries. Among the companies likely to sign deals with Gilead are Cadila, Hetero, Strides Arcolab and Mylan, while Cipla is expected to earn active pharmaceutical ingredient (API) rights.
Gilead has applied for a patent on these drugs in many countries, including India. The deal is seen as its strategic move to leverage the drugs' potential, as well as save its patent protection, which is under attack in many countries.
Commenting on the same, Sarabjit Kour Nangra, VP Research, IT, Angel Broking, said, ''As part of the deal, Gilead might allow technology transfer and data sharing for the two drugs by generic companies, which will benefit the generic companies. But on the flip side the sale of the cheaper versions by partners might be restricted only to the countries that are part of the deal. The agreement will exclude economies like China, Brazil, Ukraine and Malaysia.
While the generic penetration will allow prices to come down significantly in those 90 markets, including India, irrespective of the drugs' patent status, Gilead is likely to retain its monopoly in all other geographies. While the exact details are not know, a back of the envelope calculations, suggest that the drug can potentially be a USD 300-500 million and USD 110-185 million formulation and API opportunity respectively. Currently, on back of non-confirmation of news, we retain our numbers and recommendations on the stock. We remain neutral on Cipla and Cadila Healthcare.''
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