J&J foresees shortage of Doxil from mid October 2013 - Angel Broking

Johnson & Johnson has informed US healthcare professionals for an interruption in supply of Doxil injection to US market. The drug is used for the treatment of ovarian cancer treatment. According to J&J due to difficulties at contract manufacturer end, Ben Venue Laboratories there is likely to be shortage of Doxil in coming weeks of around mid October 2013. Additionally, J&J has not estimated any time line about availability of the drug. In Feb 2012, the USFDA entered into a limited period arrangement with Sun Pharma for the supply of Lipodox (doxorubicin hydrochloride liposome injection) as an alternative treatment to Doxil.

In February, 2013, SUNP received a generic approval. Doxil has sales of ~US 300mn. The product is expected to have contributed around US $120-130mn in CY2012 for Sun pharma and hence is a key player in the market along with J&J. Thus, any disruption on back of the same, would add significantly to the company's. While it's difficult to time the resumption of the supplies from J&J, for the full year i.e FY2014, the product can increase the net profit of the company by 3.4% and full year net profit by 8.4%. As of now we have not changed our estimates on the stock for FY2015 and maintain our neutral view on the stock, as on the best case scenario also the stock would still trade at 27xFY2015E earnings.

Source : Equity Bulls

Keywords