Strides Pharma's Tentative Approved HIV Drug To Generate Revenues Only After 2027
The patent expiry is in May 2027 and there are seven other players with tentative approvals for the HIV drug.
Strides Pharma Science Ltd. is unlikely to gain revenues from the tentative approval it got from the U.S. Food and Drug Administration for its HIV drug, as the drug's patent expires in May 2027.
Adding to this, there are seven other drugmakers with such tentative approvals.
Shares of the drugmaker surged to a 21-month high on Friday after its wholly owned step-down Singapore unit, Strides Pharma Global Pte., received a tentative approval for Dolutegravir 50mg tablets (an HIV-treatment drug) from the U.S. Food and Drug Administration, which would be manufactured at the company’s facility in Bengaluru.
The Dolutegravir 50mg tablet has a market opportunity in the U.S. of around $1,345 million, or around Rs 11,000 crore, according to IQVIA, the company said in an exchange filing.
However, the existing patents on the drug have not expired.
The tentatively approved drug, which is bioequivalent and therapeutically equivalent to the reference-listed drug, called Tivicay Tablets from ViiV Healthcare Co., has two patents that would expire in May 2027 and August 2029.
"The conversion of the tentative approval to a full approval is expected upon expiry of the constraining patents," the company said in the exchange filing. This would mean that any revenue from the sale of these drugs in the U.S. would flow only after FY27.
Adding to this, Strides Pharma is the eighth player to receive such a tentative approval for the drug. There are seven other players that have received tentative approval for Dolutegravir 50mg tablets.
They are Aurobindo Pharma Ltd., Mylan Labs Ltd., Cipla Ltd., Sandoz Inc., Laurus Labs Ltd., Micro Labs Ltd., and Macleods Pharms Ltd., according to U.S. FDA disclosure. There is also the possibility of more applicants receiving such drug approval from the regulator until the date of expiry, the filing said.
Typically, when a generic version of a drug that has gone off-patent comes onto the market, the price erosion is as high as 80–90%. This would mean that the market size shrinks in most cases to one-tenth of the pre-patent expiry market size. And with eight generic players and the innovator, the market is already expected to get segmented further.
However, since the drug was tentatively approved under the U.S. President’s Emergency Plan for AIDS Relief (PEPFAR), it would immediately qualify the company to participate in a global donor-funded programme that procures this lifesaving medicine, which is supplied in 126 countries.
As of the full year 2022, donor procurement for Dolutegravir 50mg tablets is estimated at a value of around $35 million, or around Rs 290 crore, according to the filing. Thus, the company could get some revenues from this, but margins on such procurement are usually low and there are multiple players.
Shares of the company were trading 8.56% higher at Rs 508.55 apiece at 12:11 p.m., compared to a 0.45% rise in the benchmark Sensex.
