Pharma shares snapped seven-day losing streak on October 1 after Pfizer struck a deal with Donald Trump as it was seen as a positive for Indian pharma counters.
On October 1, Nifty Pharma index closed 1.3% higher at 21,733 after falling for seven straight sessions amid steep tariffs by US on branded drugs. Piramal Pharma, Laurus Labs, Lupin, Sun Pharma led the gains in the sectoral index.
Citi has maintained its 'buy' rating on the stock, setting a target price of Rs 2,180. The brokerage noted that there is no pricing pressure on the Ilumya drug following Pfizer’s agreement with the US government, under which the pharmaceutical company will reduce prices for some medications in the US.
According to Citi, the deal between Pfizer and the US government is favorable for Sun Pharma, as it eliminates concerns related to most-favored-nations pricing for specific drugs, offering relief to Sun Pharma’s Ilumya portfolio. The brokerage also mentioned that this agreement will not affect Medicare or commercial drug pricing in the US.
On October 1, Sun Pharma shares on NSE closed nearly 3% higher at Rs 1,639 apiece.
Pfizer India shares also rose 2% on October 1 as its parent agreed to lower prescription drug prices in the Medicaid program in deal cut with Trump.
ICICI Direct Research said other branded players are likely to negotiate pricing to get respite from tariffs. It noted it as an opportunity for contract development and manufacturing organisation players, especially for those having a US manufacturing base.
Lupin shares rose 3.5% after the company received the US drug regulator's approval for a drug to treat thrombosis and pulmonary embolism.
The company received US Food and Drug Administration approval for its generic Rivaroxaban for oral suspension.
The drug, which helps treat blood clots and prevent them from coming back in children, will be manufactured at its unit in Maharashtra.
The drug's oral suspension had estimated annual sales of $11 million in the US.
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