Pharma stocks surge up to 9.5% on fresh hopes in US; Glenmark leads rally

Nifty Pharma index jumped 3 percent on Friday with Glenmark Pharma being the biggest gainer, surging up to 9.5 percent.

Pharma stocks surged up to 9.5 percent on Friday, sending the Nifty Pharma index up 3 percent. Glenmark was the biggest gainer with a 9.5 percent rise to an intraday high of Rs 854.60 after rating agency S&P Global revised the company’s outlook to positive on the proposed stake sale in Glenmark Life Sciences (GLS).

Shares of Aurobindo Pharma jumped nearly 6 percent to an intraday high of Rs 930 on the NSE amid reports that the company has received the approval to launch the Revlimid drug, used along with other medicines in the treatment of adult patients with multiple myeloma.

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Shares of Dr Reddy's Laboratories rallied over 3 percent after the incorporation of a step-down wholly owned subsidiary. The pharma company's Switzerland unit has incorporated a wholly owned subsidiary in Jamaica, Dr Reddy’s Laboratories Jamaica Limited, which will be engaged in importats, warehousing, distribution and exports of drugs, according to a BSE notification.

Shares of other pharma companies such as Abbott India, Torrent Pharma, Divi's Lab, Gland Pharma, Glaxosmithkline Pharma, Granules, Alkem Lab, Sun Pharma, Cipla, Zydus Lifesciences, Natco Pharma, Laurus Labs, IPCA Labs, Biocon and Sanofi also climbed up to 3 percent on Friday.

Also Read | Dr Reddy's Laboratories incorporates wholly-owned subsidiary in Jamaica; stock rises 1%

Systematix Institutional Equities in a report highlighted that a large pool of patent-expired drugs in the US have either not seen generic competition or have limited competition, and therefore are large markets for generic players to participate in. This could be an opportunity for Indian players as the new complex generic approvals may offset the erosion in existing ones.

"In an optimistic scenario, if we were to assume that Indian generic players are able to successfully develop copies of these off-patent complex drugs that represent 90 percent of the market opportunity, the incremental cumulative peak sales Indian players could generate from these products could should be $1,250 million, which should just offset the revenue erosion in their existing complex generic portfolios," it said.

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