Sun Pharma beats GlaxoSmithKline to enter top 3

Written by Soma Das | New Delhi | Updated: Oct 17 2012, 16:36pm hrs
After eight months of neck and neck contest, Sun Pharma knocked out GlaxoSmithKline (GSK) to wrest get the tag of third-largest domestic drugmaker by market share in the R68,000-crore domestic pharma market.

Sun grabbed a 4.69% market share for the period of 12 months ended September to beat GSK, which commanded a share of 4.67%, according to pharma research firm Aiocd Awacs. The difference in revenues remains wafer-thin at R15 crore. Sun logged R3,201 crore of sales in the domestic market in the 12 months period ended September compared with GSKs R3,185 crore of sales for a similar period. But two important indicators the growth rates, revenue minus bonus to trade channels foretells how Suns lead may grow from here.

Firstly, Sun grew at a faster pace of over 24% last year while GSK posted a growth rate of 19.8%. Secondly, if one discounts schemes companies dole out to the trade to push their products, Sun has not only beaten GSK but has actually raced ahead of Cipla to become the second-largest drugmaker in the Indian market after Abbott. Sun now accounts for 4.81% of the market. In comparison, GSK has a 4.76% share while Cipla has 4.74%.

Experts attribute this accomplishment of Sun to its drug portfolio, a large chunk of which comprises of chronic drugs, that now make up a quarter of Indian drug market. More importantly, for last five years, the high growth and high margins of the chronic drug segment has been growing at a CAGR of over 20% compared with the overall market that grew 15%.

Overall, Sun is now ranked No. 1 based on share of prescriptions. It is also among the top-three players in a total of seven therapies that includes ophthalmologists, orthopedicians, gastroenterologists and nephrologists.

Consistency in execution and bringing patients high-quality drugs in chronic therapies have been fundamental to the way we work. We expect to stay focused on building mindshare (of specialists), a company spokesperson said.

Competition in the chronic drug segment has intensified over last five years but Sun has continued to gain share by pursuing interesting strategies. For instance, in the R6,200-crore cardiac market, Sun swiftly adapted to next generation molecules and quickly grabbed a 14% market share, said Anubhav Aggarwal of Credit Suisse.

A different story unfolded in the R3,000-crore diabetes space. Although Sun lost market share on top five molecules as competition picked up, it gained share due to sales ramp up in two combination drugs,Aggarwal said.

Sun being the therapy leader in cardiac and CNS category stands a high chance of being selected by MNCs for more such alliances on patented molecules, said Aggarwal.

Analysts also point out that the productivity of Suns field-force is among the best by industry standards and the firm witnesses one of the lowest attrition rates.