Lupin falls 3% on patent case loss; analysts mixed

Shares of pharma major Lupin fell 3.3% after reports of a New Jersey US district court upholding the patent held by a unit of Johnson & Johnson's for a oral contraceptive (OC) drug Ortho Tri-Cyclen Lo.

The ruling could prevent Lupin from launching a generic version of the drug, although Barclays Capital says the Indian drug maker plans to appeal against the verdict given. "The company believes it has a strong basis for invalidating the patent," it says.

Lupin declined comment on the US court ruling, whereas the New Jersey court was not immediately reachable. "While the decision is on expected lines, the ruling is likely to limit the upside for generics from this large OC opportunity," said a Kotak Institutional Equities report.

However, Morgan Stanley reiterated its 'overweight' rating on Lupin, based on the pharma giant's earnings momentum which is driven by all-round performance (US, India, Japan, South Africa) and strong US pipeline.

Morgan Stanley submitted in a report that Lupin's other two niche products, Yaz and Loestrin 24 Fe, to be launched in 2014 will be significant revenue-generators for Lupin. In the near-to-medium term, the pharma major's launches include the mid-size Seasonique and Yasmin for the USD 2-billion generic market.