Dr Reddy's Labs shares surge 10% to hit record high

Shares of Dr Reddy's Laboratories surged almost 10 percent to hit their fresh record high of Rs 5,302.85 on BSE on September 18.

Shares of the company vaulted after the company said it had settled patent litigation with US-based Bristol-Myers Squibb's unit, Celgene, over cancer treatment Revlimid.

"In settlement of all outstanding claims in the litigation, Celgene has agreed to provide Dr Reddy's Labs with a license to sell volume-limited amounts of generic lenalidomide capsules in the US beginning on a confidential date after March 2022," said a regulatory filing by the company on September 17.

On September 16, the company said it had launched an over-the-counter (OTC) eye allergy drop Olopatadine Hydrochloride Ophthalmic Solution in the US market.

Global brokerage firm Credit Suisse is of the view that Revlimid generic cashflows should be significant (over $700 million).

The brokerage firm has an 'outperform' rating on the stock and raised the target price to Rs 5,750 from Rs 5,100.

As per CNBC-TV18, Credit Suisse believes Dr. Reddy's is one of the two players that can market Avigan in the US for COVID treatment. Besides, the company can increase share in Suboxone with innovator guiding for lower volume.

Global financial firm Citi has a buy recommendation on the stock with a target price of Rs 5,000.

Citi highlighted that the company can now launch a generic version of Revlimid in the US after March 2022 and will get a licence to sell an agreed-upon percentage of volume till January 2026.

"This is the third settlement for gRevlimid after those of Natco and Alvogen and we assume the company will be able to launch Revlimid generic in September 2022," Citi said.

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