Orchid Chemicals has filed for European marketing approval For Tazobactum injectables.
K Raghavendra Rao, managing director, Orchid Chemicals and Pharma, expects the approval for Tazobactum sometime by June 2007, while the product patent is expiring in Europe for this product in July 2007. "So we expect to be in the market on day one with this product," he says.
Rao also expects very little competition because of the complexity of manufacturing Tazabactum. He further says that the product has got around $200 million-market originator in Western Europe. "So with very limited generic players, the pricing and profitability should be extremely good for this product from Europe," he says.CNBC-TV18 shares with domain-b its exclusive interview with Rao:
Tazobactum is the product in focus now. When are you likely to receive this European marketing approval?
We have filed this under a new procedure, where we filed this application simultaneously in 14 countries last month. There is a deadline within the European law, which has to give the approval within 300 days, provided all the documentations and inspections are in good order.
So we expect the approval sometime by June 2007 and the product patent is expiring in Europe for this product in July 2007. So we expect to be in the market on day one with this product.
You said you have applied for 14 countries, does that include the US, where Sandoz and Wyeth are locking horns over this issue?
We are talking about Western Europe only, the European Union including some of the East European countries. This is because in the US, the product patent is going off in February 2007 and the process patents are going off in November 2007, so that is a different ballgame, model with Citizen petition, etc. But in EU, there is no such issue, because EU looks at the product in a different manner and those authorities have accepted our file.
Do you have any stakes in the US market as well, with regard to Tazobactum?
Yes, we have already filed our drug master file and ANDA in the US markets for this product. We are also party to the Citizen petition tangle that is going on among us, Sandoz on one side and the Wyeth on the other. The FDA has to take a call on this and we expect the decision to come soon.
So once that decision comes and the ANDAs get approved, we should be able to launch the product in the US as well.
What kind of revenue off take are you seeing for your company once this approval comes by?
This product has got around $200 million-market originator in Western Europe. From July 2007, when the product goes generic, I expect very little competition because of the complexity of this molecule.
I don't think there will be more than one-two other players at the most. So with very limited generic players, the pricing and profitability should be extremely good for this product from Europe.
The new USFDA approval that you have received for Cefotaxime, what kind of revenues do you see coming from there and what kind of competition does this product have?
Cefotaxime approval is a mature generic, there are two-three other players in this market and it is only a $30-million market. Therefore, it is not of a big size, but an approval is an approval and we are having a complete range of Cephalosporins to offer. We expect a couple of millon dollars from this product going forward.
What is the price erosion that you expect post patent that is July'07 and in your arrangement with Mayne Pharma, what would be the revenue that would flow into Orchid?
We expect revenues of approximately $10 million at the minimum. And according to our estimate, the pricing erosion should not be more than 40 per cent in Europe because it is an injectable and a very difficult technology to make. So I don't expect more than one-two players to come in the fray. So we should expect around 15-20 per cent market share, while price erosion is not more than 40 per cent.
What tranche of the $10 million would accrue to you in 2007-08?
Talking about our turnover part, only when I refer to $10 million, most of it should accrue between July and March 2008.