Tue. Sep 29th, 2020

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Glenmark’s Fabiflu is first in the market, but growth opportunity limited

2 min read

Glenmark Pharmaceuticals Ltd announced the approval of its antiviral drug favipiravir, under the brand Fabiflu, for treatment of covid-19 patients with mild to moderate symptoms. The company has launched the drug in India at a price point of 103 per tablet. While this gives the company an edge as first-mover, much will depend on how the company will capitalise on this opportunity.

In India, about 80-85% of covid-19 patients have mild to moderate levels of the disease. In fact, the Drug Controller General of India (DCGI) granted Glenmark Pharmaceuticals the permission to manufacture and market favipiravir for “restricted emergency use” in mild to moderate cases.

The revenue potential from the drug launch seems limited. Glenmark could generate about 100-150 crore of revenues from the sales of Fabiflu, according to analysts. But this does not seem to quite justify the share price jump of about 40% intraday. In fact, the company added about 3707 crore in market capitalisation on Monday.

While there are some studies that have shown clinical improvement of up to 88% in mild to moderate patients in China and Russia, the drug is still not approved as a covid-19 drug. In countries like Japan, where favipiravir is officially approved for epidemic flu, the drug is also not approved for covid-19.

“The international clinical trials, which served as the basis for the approval, include small sample size and are from semi-regulated markets such as Russia, China and UAE. In Japan, where the drug is officially approved for flu, has denied the drug approval for covid indication,” said Kunal Dhamesha, pharma analyst, Systematix Securities.

Besides, much will also depend on how effective the drug is in clinical trials in India. Glenmark has said it will begin a new clinical trial in India to test a combination of two anti-viral drugs, favipiravir and umifenovir, as a potential covid-19 treatment.

In addition, the pill burden is considerably high. Patients need to take about 18 tablets on day one and eight tablets thereafter for up to 13 days. The overall costs of the treatment is quite high and could find buyers in the mass market.

Of course, the government could also be a buyer, albeit at a lower price. But as the drug is off-patent, it implies that generic versions can be launched, which means price erosion could also be a factor in the pricing. In fact, several firms are expected to launch the drug in the Indian market in the coming weeks. A few companies are already exporting the drug to the UAE and Nepal. Besides, analysts note that the drug is not complicated to produce.

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