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Thursday, 19 July 2018

CAPITALSTARS TOP CORPORATE NEWS - 19 JULY 2018

Corporate News

Tata Motors to take 2.2% price hike in PVs to offset input cost pressure
India’s largest commercial vehicle manufacturer, Tata Motors Limited (TML) will hike prices for its passenger vehicles (PVs) by up to 2.2% effective August 2018. The price hike will be taken to offset input cost pressure. TML had recently taken a 3% price hike in April 2018 and a second hike in less than three months highlights the extent of input cost inflation currently prevailing.
The price hike is expected to vary from model to model with the maximum being 2.2%. TML has been carrying out cost control initiatives since the past few quarters to soften the impact of rising input costs. Given the steep rise in commodity prices, price hike will be essential to maintain margins.

Aviation stocks fall following poor passenger traffic in June
Directorate General of Civil Aviation (DGCA)’s air traffic report for the month of June showed 4.5% m-o-m decline from 11.86 mn in May to 11.33 mn in June, 2018 in passenger growth. It is ironical that despite various discounts/offers by airlines such as Jet Airways, Air Asia, SpiceJet, Indigo on select domestic routes given monsoon season, there has been a de-growth in passenger traffic over the previous month. However, there was a growth of 18.4% m-o-m from the corresponding period of previous year (May 2017).

Cipla receives USFDA approval for Solifenacin Succinate
Cipla has secured a USFDA approval to manufacture Solifenacin Succinate (gVesicare). Solifenacin Succinate is an antispasmodic and it is used to relieve symptoms associated with an overactive bladder. The drug is marked by Astellas Pharma as Vesicare.
Vesicare achieved annual sales of ~$900mn for FY17. Currently, only Teva has approved generic version while Watson, Glenmark, Ajanta, Amneal and Cadila have tentative approval on this drug.

Lupin gets tentative approval for gCialis
Lupin has received tentative USFDA approval to manufacture generic Tadalafil tablets USP in various strengths (2.5mg/5mg/10mg/20mg). Tadalfil is an Eli Lilly’s product which is sold under the brand name Cialis.
Tadalafil is indicated for the treatment of erectile dysfunction and benign prostatic hyperplasia. As per IQVIA MAT April 2018 date, Tadalafil tablets, in the above mentioned strengths, had annual sales of approximately ~$1.9bn in the US market.  With Viagra generics hitting the markets, Cialis market is likely to shrink before it goes off patent.

Cadila gets approval for Piroxicam Capsules
Cadila Healthcare has received the final USFDA approval for Piroxicam Capsules USP in strengths of 10mg/20mg. Piroxicam anti-inflammatory drug with analgesic and antipyretic activity is indicated for the symptomatic relief of rheumatoid arthritis, osteoarthritis or ankylosing spondylitis.
Piroxicam Capsules are sold under the brand Feldene Capsules by Pfizer. The US market for Piroxicam capsules 10mg and 20mg was ~$11mn in CY17 and several companies are already selling generic of this. Hence, we don’t expect the drug to make a meaningful contribution to Cadila’s revenue.


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