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Last Updated : Jul 01, 2016 12:01 PM IST | Source: Moneycontrol.com

Strides up 7% on successful FDA inspection, Macquarie's top pick

"With the recently closed establishment inspection report announced on June 7, the entire facility is now US Food & Drug Administration compliant," says the Bangalore-based pharma company in its filing. This facility was inspected earlier in February.

 
 
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Moneycontrol Bureau


Strides Shasun shares rallied 6.7 percent intraday Friday after successful completion of USFDA inspection at its flagship oral dosage facility in Bangalore with Zero 483s.


"With the recently closed establishment inspection report announced on June 7, the entire facility is now US Food & Drug Administration compliant," says the Bangalore-based pharma company in its filing. This facility was inspected earlier in February.

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The USFDA audit was carried out related to a product filed from the new semi solids block from where the company has made a series of filings.


Its Bangalore facility manufactures oral dosage forms, including tablets, capsules (both hard gelatine and soft gelatine), ointments and liquids. It also supports important current and future submissions for the US market.


"Although widely anticipated, this is a positive development for the company. Going ahead, we would be keenly tracking any approvals from this facility," says Macquarie that has maintained outperform rating on the stock with a target price of Rs 1,650.


Strides is one of brokerage house's top picks in the pharma sector along with Sun Pharmaceuticals (outperform rating with target of Rs 1,000) and Glenmark Pharmaceuticals (Outperform with target of Rs 1,140).


Catalyst for its rating and target price are US approvals and merger synergies being evident in numbers.


US will be key driver for the company, says Macquarie which expects US sales to further ramp up in FY17, driven by upcoming launches (7–8 launches guided for FY17), including the key soft-gel product, Lovaza.


Strides expects the US business to hit the USD 100–120 million mark in FY17.


"Merger synergies with Shasun and backward integration of Aspen's Australian generic business would be additional drivers for margins in FY17 and beyond," says the brokerage house.

At 11:33 hours IST, the scrip of Strides Shasun was quoting at Rs 1,182.60, up Rs 54.05, or 4.79 percent amid high volumes on Bombay Stock Exchange.

Posted by Sunil Shankar Matkar



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First Published on Jul 1, 2016 12:00 pm
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