Can domestic formulations shield Indian pharma from US pricing pressure in Q3?

ET Intelligence Group: Indian pharmaceutical companies are set for a mixed third quarter, with domestic formulations and specialty launches driving growth amid US pricing pressure. The US generics segment is likely to gain from new launches while contract research, development, and manufacturing organisation (CRDMO) and active pharmaceutical ingredient (API) segments may deliver mid-single-digit growth. Sun Pharmaceuticals and Lupin may lead amid specialty traction. Cipla and Dr Reddy's Laboratories face softer US sales. Divi's Laboratories stands out with double-digit growth from custom synthesis, and Aurobindo is likely to post steady gains on injectables and efficiency. Sun Pharma's revenue is expected to grow in mid-single digit driven by specialty and domestic segments. It is expected to outperform industry growth aided by stronger growth in domestic formulation (DF) sales due to new product launches. US sales are expected to decline given lower Revlimid sales though Sun Pharma is expected to be among the least affected pharma companies. Dr. Reddy's Laboratories is expected to post a muted performance in the third quarter, weighed down by pricing pressure and lower contribution from key products in North America. The domestic business is likely to remain strong, supported by traction in vaccines, cardiac and pain therapies. Key factors to watch include progress on GLP-1 approvals, biosimilar filings, and developments around potential partnerships in the US market to mitigate tariff-related risks. 126555079 Aurobindo Pharma is expected to deliver modest performance, supported by improving traction in injectables, even as pricing pressure on key products weighs on growth. European business might continue to expand on the back of portfolio diversification and enhanced supply reliability, while emerging markets are likely to remain flat. The domestic formulations business is expected to benefit from differentiated offerings. Cipla is expected to deliver moderate growth in the third quarter helped by high single digit growth in the domestic market and new launches such as Yurpeak, a Type 2 diabetes drug. The US business is likely to remain weak due to pricing pressure and higher competition in key products. It may partly be offset by incremental gains in select therapies such as Abraxane and Albuterol. Lupin is expected to deliver a strong quarter, supported by sustained traction in the US business from Tolvaptan and Mirabegron drugs.