FDA warning on Incivek likely to hit Shasuns revenue

Written by R Ravichandran | Chennai | Updated: Dec 24 2012, 09:05am hrs
Shasun Pharmaceuticals, one of the major suppliers of APIs (active pharmaceutical ingredients) and CRAMs player (contract research and manufacturer) is likely to take a hit on its revenue in the near to medium term due to USFDA's serious Black Box Warning on the label of Incivek (Telaprevir). Shasun has been the major supplier of API for Incivek to Nasdaq-listed Vertex Pharmaceuticals.

Incivek (Telaprevir) tablets is an oral medicine that acts directly on the Hepatitis C virus protease, an enzyme essential for viral replication. Shasun officials were not available for comments.

Vertex had on December 19 announced that as per USFDA instructions the company has incorporated Black Box Warning on the label of Incivek (Telaprevir) following reports that some patients die from severe skin reactions after taking it in combination with Peginterferon alfa & Ribavarin (Incivek combination treatment).

According to the USFDA, boxed warning of Incivek label would state that Incivek combination treatment must be immediately stopped in patients experiencing a rash with systemic symptoms or a progressive severe rash. Though rash and serious skin reactions were known side effects of Incivek and have been reported previously. However, this is the first time the company has reported that such reactions have resulted in fatalities. According to company, in phase 3 trials less than 1% patients who received Incivek combination treatment experienced serious skin reaction.

IndiaNivesh Securities, which is tracking Shasun Pharmaceuticals, said: "It is believed that given development may have negative impact on Shasun's financials in near to medium term due to decline in API's revenue & unfavorable operating leverage of Shasun UK. According to estimates, Incivek API supply is likely to contribute around $20 million per year to Shasun's revenue."

Daljeet Kohli, head of research, IndiaNivesh, said, "We also believe that Shasun has many other APIs in pipeline (8 in phase III) with its UK subsidiary.