The shares of Laurus Labs jumped nearly 8 percent in morning trade on January 30 after the US President Donald Trump-led government approved the decision to resume funding for the US President's Emergency Plan for AIDS Relief (PEPFAR) for the treatment of AIDS.
The shares were trading at Rs 588 per share, as seen at 10.45 am. Notably, the Trump administration on January 24 had halted the disbursement of funds to programmes to treat HIV in developing countries for at least 90 days. This aligned with Trump's broader 'America First' policy.
Shares of Laurus Labs tumbled nearly 14 percent after the announcement, fueled by profit booking after its December quarter earnings. The company later issued a statement saying that it 'reasonably believes' that there will 'not be significant impact' on its business.
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Later on January 28, US Secretary of State Marco Rubio issued a temporary waiver of the pause of "life-saving humanitarian assistance" during the period, including the PEPFAR programme. The waiver excluded services like abortion, gender, diversity, transgender and non-life saving work. White House made the announcement on January 29. The waiver was widely welcomed by global health agencies.
"UNAIDS welcomes this waiver from the US Government which ensures that millions of people living with HIV can continue to receive life-saving HIV medication during the assessment of US foreign development assistance," said UNAIDS Executive Director Winnie Byanyima.
The PEPFAR program, launched during the George W Bush administration, has been credited with saving millions of lives globally, providing billions in funding to combat HIV and supplying ARVs to over 20 million people across 55 countries.
Notably, Motilal Oswal has kept a 'Buy' rating for the stock of Laurus Labs, stating that the company had beaten its estimates of Q3 results. "Laurus Lab significantly beat our earnings estimates in Q3 FY25, led by a scale-up in the CDMO segment...We raise our earnings estimates by 4 percent/3 percent/3 percent for FY25/FY26/FY27 to factor in a) improved visibility for execution of CDMO contracts, b) a gradual uptick in ARV formulation sales, and c) better operating leverage. We value Laurus at 40x 12M forward earnings to arrive at a target price of Rs 720," it said.
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