Ranbaxy Laboratories has launched generic Valtrex (valacyclovir hydrochloride) tablets in the US market, two years after it settled a patent dispute with GlaxoSmithKline (GSK) and secured a 180-day sales exclusivity for it. Though Industry had an apprehension that whether Ranbaxy will be able to monetize this opportunity or not because of ongoing issue at Dewas facility from where this molecule was filed earlier. But company has managed to get Valacyclovir manufactured from the production facility of its US subsidiary, Ohm Laboratories, thereby salvaging the six-month exclusive marketing opportunity.

Impact
• As it is the only other player to launch this drug after innovator company Glaxo Smith Kline Pharma (GSK), we expect the company to garner about 11-12% market share of US$ 2.2 billion annual market of Valtrex for next six months (exclusivity period). At topline level, we expect drug to contribute Rs 1,000-1,050 crore in next 6 months.

• Launch would strengthen Ranbaxy’s presence in the antiviral segment- Valterx (valacyclovir) is an antiviral drug used to treat genital herpes, cold sores and shingles. Our View We have revised our earnings estimate keeping in view the revenue inflow from the launch of Valtrex. Going forward, we will see further improvement in topline as it has entered into various strategic alliances i.e. with Medy-Tox Inc. & Validus Pharmaceuticals. We believe the company would post good numbers in Q4 CY09 and outperform its own guidance, sales target of Rs 7,000crore.

We believe the alliances with GSK and Merck in the area of New Drug Discovery Research and upcoming first-to-files (FTFs) Flomax (market size of ~ US$1.2 billon) are the positive triggers for the company. Company also holds marketing exclusivity rights of another drug Flomax whose patent expires in March 2010. The company is hopeful of getting the US FDA clearance for its Dewas plant in the next few months.

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