Wyeth-51% Subsidiary Of Pfizer May Quote At Rs 1200 in A Year
2011 was the first full year of operations of Wyeth as a part of the Pfizer group, the world's largest biopharmaceutical company, replete with milestones in sales, marketing and manufacturing. Wyeth continues to dominate the market in oral contraceptives and hormone therapy.
With a view to consolidate it's position and grow faster, Wyeth is launching new Branded Value Offerings (BVOs) in Women's Health and Anti-Infectives, two areas where it has rich experience and heritage brands.
Wyeth's success in vaccines is well known. During 2011 sales of Prevenar 13, the new generation pneumococcal conjugate vaccine, continue to be buoyant. The vaccine is the largest selling toddler vaccine in the country.
In 2010-2011, the total audited pharmaceutical market in India grew by 15.9% to reach USD 12.2 billion. The retail sector accounted for USD 10.4 billion and grew at 15.3%, while the hospital sector accounted for USD 1.1 billion and grew by 26.0%. (Source : IMS MAT March 2011). According to IMS, currently the Indian pharmaceutical market ranks 14
th globally in terms of value and 3rd in volume. (January – December 2010).Volumes contributed 7.6%, while new products contributed 6.5% and price contributed 1.2% to the growth of 15.3% achieved by the Indian pharmaceutical market during 2010-2011 (Source: IMS-SSA MAT March 2011).
Opportunities
The pharmaceutical market in India looks poised to grow to USD 55 billion in the next ten years, according to a report from McKinsey. At this projection, the market will be comparable to several developed markets. Even more impressive will be its level of penetration. In terms of volume, India will be at the top, a close second only to the US market.
Over the years, India's healthcare sector has seen growth of corporate hospitals, as well as the expansion of chemist outlets to small towns. The growth in purchasing power of Indian consumers is expected to contribute to 40% of the projected market growth. Improvements in medical infrastructure will account for 20% growth.
Greater health insurance penetration will add 15% and India's changing epidemiological profile will account for 10% growth.
As per news reports, India plans to increase its allocation for healthcare from 0.94% to 2-3% of GDP over the next five years. This is a very positive step towards enabling healthcare. This coupled with overall economic growth and changing demographics can result in improved affordability and greater access to medicines.
The industry is taking steps to expand beyond metros and cities to smaller towns, but its efforts are constrained by inadequate investment in rural infrastructure and low insurance penetration.
Financials-Annualised 2011 EPS Rs 55
The Company's sales for the period under review were Rs
636 crores. Sales for the period April 2010 – March 2011 were Rs 494 crores (April 2009 – March 2010, ` 429 crores) which represents a growth of 15% on a twelve month basis. The Company continues to maintain its leadership position in Oral Contraceptives, Hormone Therapy, Folic Acid and Pneumococcal Vaccine markets.The Company continues to invest in all the key brands to increase sales and also takes initiatives to reduce cost with a view to improving profitability and thus increase stakeholder value. The Company proposes to expand its presence in its key therapies by launching new Branded Value Offerings.
In the field of anti-infectives, the Company launched Warclav* (amoxicillin-clavulanate combination) to build on its long legacy in the amoxicillin market and to consolidate its position in this segment. In the macrolides segment, the Company launched VICON* (Azithromycin tablets).
During the year, the Company launched Prevenar 13* which protects children against 13 types of disease causing
Streptococcus pneumonia bacteria. Prevenar 13* offers a broader coverage against Streptococcus pneumoniae serotypes than that offered by the standard Prevenar Vaccine (PCV 7). Prevenar 13* has been well received by pediatricians and has grown to become one of India's largest selling vaccines.It received the Marketing Excellence Award from the Organisation of Pharmaceutical Producers of India (OPPI) in 2010. Increasing consumer franchise, improving market presence, new packaging and new formulations with ingredients such as Aloe Vera were the focus for the Company's Consumer Health care brands, Anne French* and Anacin*. Anacin* was relaunched as a smaller strip, with a convenient consumer price-point. Anacin* Multi Pain was rolled out in all the major states.
OUTLOOK
A McKinsey report says the BRIC countries (Brazil, Russia, India and China), will lead growth in the coming decade. Furthermore, India is expected to continue its high growth curve and rank among the top 11 global pharmaceutical markets by 2015.
India's ascending economy has brought about a transition in the healthcare sector. At one end of the scale, like most emerging economies, India is experiencing a spurt in lifestyle diseases. At the other end of the scale, the challenges of communicable diseases continue to weigh heavily on India.
With the changing disease profile in India, the pattern of demand for medicines is also shifting. A decade ago, anti-infective and gastrointestinal drugs and vitamins accounted for 50% of the domestic market. By next year, they are expected to account for just 36%, says a PricewaterhouseCoopers report.
Conversely, drugs for cardiovascular problems, disorders of the central nervous system and other chronic diseases will account for 64% of total sales, up from 50% in 2001. India thus needs to deal with the problems of infectious diseases in addition to addressing the rapid upsurge in chronic disease risk factors and deaths, especially in urban settings.
India's healthcare sector, growing at 16% annually, is likely to touch USD 350 billion by 2023, an eight-fold increase from 2008, estimates consulting firm Technopak. According to Ernst & Young, healthcare spending could rise to contribute 6.1% of India's GDP in 2012 (currently at 4.8% of GDP) and employ around nine million people (from four million today).
Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.
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