Comments
Emkay Global
Sun Pharma (Hold)
Target: ₹775
CMP: ₹832.4
We believe that the recent run-up in Sun Pharma stock due to the good traction for the Winlevi launch is an over-reaction to a typical launch strategy of having a Patient Assistance Program (PAP). A careful analysis of Winlevi prescriptions (Rx) suggests that two-thirds of the Rx come via the PAP.
The company is offering a coupon card that limits out-of-pocket (OOP) cost for patients to as low as $25/month. The patient can use the card for as long as 12 months, with total benefits of $7,231 for 14 tubes. Based on this, we believe the revenue realization for PAP Rx would be very low.
PAP is a typical launch strategy used by pharma companies to garner insurance (formulary) coverage. However, literature indicates PAPs rarely drive higher insurance coverage. This is something we have already witnessed with multiple drugs (e.g., Absorica). Hence, we believe total Rx, excluding PAP Rx, is a true reflection of the underlying demand, and we will monitor it to assess Winlevi's potential.
For now, we maintain our below-Street expectation for Winlevi peak sales at $60 million, based on: 1) Rx trend, excluding PAP, 2) efficacy profile and 3) competitive landscape. We maintain our Hold rating on Sun with a target price of ₹775.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.