RESEARCH 16 February 2012 Sushant Dalmia, CFA SUN PHARMA Poonam Sanghavi Wyeth claims USD960mn damages for Protonix Sun Pharma has announced that in the on-going patent litigation on generic Protonix in the US district court of New Jersey, Wyeth (Pfizer) has submitted expert reports claiming damages to the tune of USD960mn (Rs42/share) from Sun Pharma. Wyeth has now claimed USD2.1bn from Teva and USD960mn from Sun Pharma for the at-risk launch of generic Protonix. Thus, Wyeth in totality is claiming USD3bn for the launch. Our assessment would be that the claims from Wyeth are on the higher side on back of 1) Protonix was a USD2bn brand for Wyeth before the launch of generic. 2) Wyeth generated revenues of USD806mn (including AG contribution) from Protonix in CY2008 post the at-risk launch by Teva and Sun. 3) Sun Pharma launched the drug post the launch by Teva and AG. 4) Sun Pharma could have made profits to the tune of USD240-280mn from the launch. We expect that the claims could be in the range of USD300-500mn (Rs13-22/share), if Sun Pharma is unable to get a favourable judgment on the patent litigation. Sun Pharma has a strong balance sheet (cash of USD1bn) and the generic Protonix trial could be a long time driven process, however we expect this to be a sentimental negative for the stock. The stock is up ~8% in last one month, and is trading at 25.9x FY12E and 23.2x FY13E earnings. We maintain REDUCE on the stock with a Target Price of Rs534 (22x one year forward earnings) on back of rich valuations. Protonix Litigation- A run through: In June 2007, Wyeth filed a motion in the US Court seeking preliminary injunction against both Teva and Sun preventing them from launching the generic version of Protonix pending Court’s final decision in patent litigation. In September 2007, the court denied the motion, however the court did not conclude that the patent was invalid. Teva launched at-risk the generic version of Protonix in Dec. 2007, post the approval on its ANDA in Aug 2007. Following this, Watson launched Authorised Generic (AG) in Jan 2008. Subsequently, Sun Pharma also launched the product in Jan 2008. In July 2010, the US district court upheld the jury verdict there by concluding that the Protonix patent is not invalid. As a result, Sun Pharma stopped the shipment of the product. Sun Pharma’s plan of action: Sun Pharma has indicated that the claim by Wyeth is overstated and continues to believe that Protonix patent is invalid. The US district court has upheld the patent as valid and now is proceeding to ascertain the damages. Sun Pharma would submit its report on the amount of damages. Post the decision by the US district court, Sun
PINC QUICK BITE Pharma has a right to appeal in higher court on patent validity and the amount of damages. Our take: Wyeth has now claimed USD2.1bn from Teva and USD960mn from Sun Pharma for the at-risk launch of generic Protonix. Thus, Wyeth in totality is claiming USD3bn for the launch. Our assessment would be that the claims from Sun Pharma are on the higher side on back of 1) Protonix was an USD2bn brand for Wyeth before the launch of generic. 2) Wyeth generated USD 806mn (including AG contribution) from Protonix in CY2008 post the at-risk launch by Teva and Sun. 3) Sun Pharma launched the drug post the launch by Teva and AG. 4) Sun Pharma could have made profits to the tune of USD240- 280mn from the launch. We expect claims could be in range of USD300-500mn (Rs13-22/ share), if Sun Pharma is unable to get a favorable judgment on the patent litigation. KEY FINANCIALS (CONSOLIDATED) KEY RATIOS
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RESEARCH OUTLOOK AND VALUATIONS: Sun Pharma has a strong balance sheet (cash of USD1bn) and the generic Protonix trialcould be a long time driven process, however we expect this to be a sentimental negativefor the stock. The stock is up ~8% in last one month, and is trading at 25.9x FY12E and23.2x FY13E earnings. We maintain ‘REDUCE’ on the stock with a target price of Rs534(22x one year forward earnings) on back of rich valuations.Exhibit: Key events pertaining to Protonix
The US court denied the motion filed by Wyeth seeking preliminary injunction againstTeva and Sun Pharma
Teva launched at-risk the generic version of Protonix
Watson launched the Authorised Generic (AG). Post that Sun Pharma also launchedthe product
In a separate Para IV litigation, the jury in New Jersey held that the patent was notinvalid.
The US Court ruled against the arguments put forth by Sun Pharma regarding theobviousness type double patenting defenses and upheld the patent.
The Company put all its shipments of the product on hold, re-evaluating the marketingof the product as a part of its at-risk launch of Protonix.
Wyeth claims USD960mn damages from Sun Pharma
RESEARCH Consolidated Financials Income Statement Cash Flow Statement Cash flow from oper (a) Cash flow from inv.(b) Free cash flow (a+b) Reported EPS (Rs) Cash flow from fin. (c) Recurring EPS (Rs) Net chg in cash (a+b+c) Balance Sheet Key Ratios Shareholders' funds Capital Employed Total Assets 1-Year forward P/E Band Key Assumptions RESEARCH Head of Research, Auto, Cement Construction, Power, Capital GoodsRating Objective Large Caps M.Cap > USD1bn M.Cap <= USD1bn More than 15 More than 20 Accumulate (-)5 to +5 Below (-)5 Less than 0 bright thinking
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SISTEMA INFORMATIVO MIUR - DIPARTIMENTO DELL'ISTRUZIONE SS-13-HN-XDO85GRADUATORIA AD ESAURIMENTO 21/06/2007CENTRO SERVIZI AMMINISTRATIVI DELLA PROVINCIA DI SIRACUSA PAG. 1ELENCO PROVVISORIO GRADUATO DOCENTI IN POSSESSO DI TITOLO DI SPECIALIZZAZIONE NOMINE TEMPO DETERMINATO SCUOLA ELEMENTARESPECIALIZZAZIONE : G - INSEGNAMENTO A MINORATI PSICOFISICI. FASCIA : 2POS. DATI ANAGRAFICI PUNTEGGI RIS. PREF