Stocks
Prevacid ODT could be a low-competition opportunity for Cadila Healthcare

Nomura remains positive on Cadila Healthcare, as it expects US approvals accompanied by business consolidation to help improve margins and profitability, in a research note on the pharma company

Cadila Healthcare won a favourable Appeals court decision on Prevacid ODT, which could be an interesting low-competition opportunity, reports Nomura in a research note based on management interaction. The company expects to gain approval for Prevacid ODT over the next 12 months, and Nomura believes the product could contribute up to Rs18/sh share annually in the initial period. The other low-competition launches that are possible over the next 12 months include Toprol XL, Asacol HD, Lialda (contingent on litigation outcome), nasal sprays (Azelastine, Desmopressin Acetate), transdermals (clonidine, estradiol weekly) and one Nesher product.

 

Nomura remains positive on Cadila Healthcare, as it expects US approvals accompanied by business consolidation to help improve margins and profitability. Business consolidation could include moving out of non profitable territories and lowering capex.

 

The pharma company’s management expects growth to revive in India formulation, consumer and JV businesses in FY15.

 

According to the Nomura forecast, the 12-month share price target is adjusted to Rs1,103/sh (18x one-year forward EPS of Rs58.6 + Rs47 for Asacol HD exclusivity). The current stock price is supported by expectation of earnings growth in FY16. The stock trades at 21x Nomura’s FY15 EPS estimate and only 13.2x Nomura’s FY16 estimate.

 

The company’s performance and forecast is captured in the following table:

 

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Implications of SEBI limits on directorships

‘A person can serve as an independent director on the boards of a maximum 7 listed companies and a maximum of 3 listed companies in case the person is serving as a whole time director in a listed company’ says SEBI. What does this mean?

SEBI has recently announced new Corporate Governance norms with reference to independent directors. Besides mandating a woman director on each board, SEBI has now stipulated that a person can serve as an independent director on the boards of a maximum 7 listed companies and a maximum of 3 listed companies in case the person is serving as a whole time director in a listed company.

  

According to Pranav Haldea, managing director, PRIME Database, which runs www.indianboards.com, a joint initiative of PRIME Database and NSE, “this would mean that 97 persons would have to resign from 283 independent directorship positions in NSE-listed companies by 1st October 2014…This is a welcome move as independent directors would now be able to spend more time on a company.”

 

The person with the maximum number of directorships in listed companies is Mr Pradip Kumar Khaitan with 14 directorships.

 

 Maximum Number of Directorships in companies listed on NSE & BSE

 

Director Name

No.of
Directorships

MR.PRADIP KUMAR KHAITAN

14

MR.ANIL HARISH

13

MR.DILIP JAYANTILAL THAKKAR

13

MR.RAJENDRA AMBALAL SHAH

13

MR.SANJAY KHATAU ASHER

13

MR.BANSIDHAR SUNDERLAL MEHTA

12

MR.NASSER MUKHTAR MUNJEE

11

MR.PRADIP PANALAL SHAH

11

MR.SRINIVASAN NATESAN

11

MR.AMBALAL CHHITABHAI PATEL

10

MR.BALAJI RAO JAGANNATH RAO DOVETON

10

MR.BRIJ BEHARI TANDON

10

MR.HAIGREVE PRADIP KUMAR KHAITAN

10

MR.JAYANT NARAYAN GODBOLE

10

MR.RADHA KRISHNA PANDEY

10

 

MR.SURESH NARSAPPA TALWAR

10

Source: indianboards.com

 

According to Mr Haldea “what is welcome is that SEBI has at least prescribed that if a person has already served as an Independent Director for 5 years or more in a listed company (as on 1 October 2014), he shall be eligible for appointment for only one more term of 5 years.”

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Why are healthcare costs shooting up? – Part I

The pharmaceutical industry is spending lavishly on medical scientists and doctors for hospitality in expensive hotels, gifts, honorariums, conference and symposia expenses, consulting fees, and research grants. This money eventually is paid by the consumers in the form of soaring cost of medical treatment

Recently The New York Times has exposed a startling fact. More than 47% of the Harvard Medical School faculty are on the regular pay roll of drug companies. Here is what NYT found out.
 

 “The ties between clinical research and industry include not only grant support, but also a host of other financial arrangements. Researchers serve as consultants to companies whose products they are studying, join the advisory boards, and the speakers’ bureaus, enter into patent and royalty arrangements, agree to be listed authors of articles ghost written by interested companies, promote drugs and devices at company sponsored symposia, and allow themselves to be plied with expensive gifts and trips to luxurious settings. Many also have equity interest in companies. Academic medical institutions are themselves growing increasingly beholden to industry. Harvard used to be an exception; but they are also softening their stand,” wrote Marcia Angell.
 

This should give a wake up call to all thinkers. I have been writing for years that most of what doctors learn from textbooks and their teachers is the “wisdom” distilled by the vested interests in pharmaceutical and medical devices industries!  Harvard revelation is only the tip of the iceberg. In India, many doctors make a comfortable living thanks to the largesse of the industry. The unholy bond between the academia and the drug industry is getting stronger.
 

The word ‘intelligence’ is derived from the roots inter (between) and ligere (to choose). An intelligent doctor, therefore, should be able to choose between the good and the evil for the sake of his/her patients as also to become a person of value and not just a person of success. It was Albert Einstein who wrote that one should “try to be a man of value, rather than a man of success.” An editorial in the New England Journal of Medicine deplores the evil in medical science.  My lamentations about medicine having gone to the market place, riding piggyback on technology, making it almost impossible to believe any of the short case-control studies published even in the “respectable” journals for years, had only fallen on deaf ears. I have become a laughing stock in the higher echelons of the Indian medical academia! I am told that a group of cardiologists in Mumbai, when asked to assess me for the Fellowship of the Academy of Medical Sciences some years ago, had opined that “he is only a quack and has no idea what cardiology is all about!”  I did become Fellow-thanks to a few thinkers still in the organisation. 
 

And now, comes this news from America which shows how thoroughly compromised the academics are. I am sure our holy cows would now wake up from their sedative induced slumber. They would want things to come from America for them to believe anything in any field. Our western slavish mentality knows no bounds. We could realise that Amarthya Sen is a gem (Bharat Ratna!) only after the Nobel Committee identified him!

I could quote some of my bitter experiences, which I had shared with readers from time to time, here to complete the picture. A symposium on treatment of high blood pressure was being held in a five-star hotel in Goa. I was pitted to speak against a star speaker from America. This gentleman is a regular company “employee”, having a very high academic status in addition. The drug in question was a receptor blocker of a particular new variety. While the American went on to describe the drug as the panacea for all hypertensives and that it should be the first drug of choice, I had to, per force, take the opposite stand as I was convinced that this drug was not the drug of first choice.
 

The great master ridiculed me and the audience, of course, was with him! In March 2000, while I was on a lecture tour of some Universities in the US, early morning my hotel room was blaring out the news item that this very drug, in the first ever human study, had caused many more heart failures, while it is touted as the drug to prevent heart failure! The study has since been stopped and the newscaster was asking nearly a million Americans who are already on the drug to contact their doctors to get the drug changed immediately. I tried in vain to contact the “great” man but to no avail. This happens again and again. The drug in question was one of the alpha blockers. Any blocker, alpha, beta, ACE or H1—or, for that matter, any other drug that blocks any normal body function, is not conducive to normal body physiology. Recent revelations about metaprolol in the POISE study are a good example. There are other ills which follow all the above blockers but space does not permit me to go into them in greater details.  
 

No one has so far described science in a way that satisfies everyone. “Science, for example, can not give absolute proofs of the laws of nature because, although we can test an idea repeatedly, we can never be sure that an exception does not exist,” says Michael Cross in the New Scientist 2000 February 19th.  Every time something goes wrong and is detected, anyone could take refuge under this clause. This statement of Cross should not be misread to say that science is not good. It only goes to emphasise the fact that scientific methods are but one of the many ways to human wisdom. 
 

One other subtle way of taking the practicing doctor for a ride by the companies is the use of confusing statistical jargon which, unfortunately, most medical students do not get to study in the medical school. This specially applies to the risk factor correcting efforts using drugs, a real money spinner. There are seventeen studies (RCTs) in the area of blood pressure lowering drugs, where the collective relative risk reduction (RRR) was only -20% and this is the one sold in the journal articles and company literature. If one were to analyse the absolute risk reduction (ARR) it comes down to -0.8% only! This will translate into a very insignificant survival benefit (SB) of just 0.8%. To put it differently, if a healthy man with moderately raised blood pressure were to take the drugs religiously for five years to reduce his box blood pressure, despite lots of other inconveniences due to the drug in question, his chance of survival becomes 96.8%, whereas it would still be 96% without any drug at all for five years but with simple change of mode of living!  

Almost identical figures arise from all the cholesterol lowering drugs. That is not all. The number needed to treat (NNT) unnecessarily is another serious matter. To save one young man with mild to moderate hypertension from a possible stroke in the next five years, the doctor will have to treat 850 normal people with the same level of BP for a period of five years. The adverse drug reactions of those drugs in five years would be enormous, to say the least, both in morbidity and mortality, leave alone the cost! Practising doctors get to see only the RRR figures that look very impressive. The table below shows it all! 

 

“Who lies for you will lie against you.” -Bosnian Proverb  
   

(This is the first part of a two part series)
 

( Professor Dr BM Hegde, a Padma Bhushan awardee in 2010, is an MD, PhD, FRCP (London, Edinburgh, Glasgow & Dublin), FACC and FAMS. He is also Editor-in-Chief of the Journal of the Science of Healing Outcomes, chairman of the State Health Society's Expert Committee, Govt of Bihar, Patna. He is former Vice Chancellor of Manipal University at Mangalore and former professor for Cardiology of the Middlesex Hospital Medical School, University of London.)

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COMMENTS

Merchant M S

3 years ago

SIR,
Today our people need safe drinking water, proper disposal of sewage and garbage, planning proper drainage, planned housing, stop air pollution, grow more tress, unadulterated food products, simple hygiene like washing your hands before eating,
basic immunization, importance of exercise and simply walking a mile a day. Any takers? Crores of rupee is spent on chemotherapy without any increased survival

Gopalakrishnan T V

3 years ago

Greed and maximisation of profit have become the order of the day and this has been encouraged by the top management institutes. MBAs are the brain behind and trapping everyone in some transaction or other has been their hallmark. Insurance, consumer durables, travel costs and any transaction of commercial nature, these MBAs brain work and customers are trapped and exploited without being questioned and without any ethics and principles. Every transaction comes out with a rider and it becomes a recurring expenditure. MBAs have changed the very culture of commerce and trade and Greed is the deciding factor in pricing the commodity or service. Inflation in India is also due to such aggressive pricing. This article is a proof as to how consumers are exploited mercilessly.

Narendra Doshi

3 years ago

Respected Dr. Hegde,
What are your observations on early morning fasting everyday for around six hours and then start with amla/palak/methi etc vegetable juice followed by tomato juice etc when next hungry followed by raw fruits when next time hungry to be followed by again only raw fruits and vegetables preferably or a cooked food with lots of vegetables as a daily diet.Pl refer http://www.newdiet4health also. This lifestyle has eliminated and avoided any medicine intake and doctor visits, for any type of illness. It is a low cost healthy solution for masses.More cooked eating, milk & dairy products intake and oily food leads to more diseases.

Yerram Raju Behara

3 years ago

A great revelation! Governments do not budget adequately for safe drinking water and good drainage and sewerage systems but go after creating health budgets. If the former two are taken care of the budgets of all families - rural and urban - will go more for good food and better health. But the doctors, consultants, educationists and executives in governments, insurance companies survive on poor systems and lack of basic amenities for good living. Coming to Harvardians, they constitute ( do not exclude IIM_A) are after all hired intellectuals. When I told somebody that there is intellectual prostitution, he asked me "why do we want to insult prostitutes?". I feel he is right.

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