Pharma wrap: Divis takes a hit, govt restricts stent makers from pulling out

Dmitry Stolyariv, a heart surgeon, holds a stent, which is inserted into constricted coronary arteries to help keep them open and normalise blood flow, as he performs a surgery on a patient with a blood clot in the carotid artery at the Federal Center of Cardiovascular Surgery in the Siberian city of Krasnoyarsk, Russia, September 28, 2016. Picture taken September 28, 2016. REUTERS/Ilya Naymushin - RTSQ3M6

After gaining for three consecutive weeks, pharma stocks cooled off this past week as investors booked profits. The decline was in line with the larger benchmark Sensex which was under pressure owing to worries over an economic slowdown.

How did the Pharma Index perform?

The BSE Healthcare index dropped 3 percent in the past week, while the benchmark Sensex declined 2.2 percent.

Divis was the biggest loser this week, with its shares dropping 12.03 percent. The other stocks that declined included Dr Reddy's (-5.5 percent), Glenmark (-4.98 percent), Cadila Healthcare (-4.91 percent), Aurobindo Pharma (-4.47 percent), Torrent Pharma (-2.94 percent), Sun Pharma (-2.1 percent) and Lupin (-0.36 percent).

Here's what kept the sector buzzing:

# Divis shares plunged this week after its Vizag unit 2 received six observations from the US health regulator. The observations indicated that the resolution of the import alert may take longer time.

# Sun Pharma shares were under pressure after a tepid outlook from the management for the current financial year. The company indicated a single-digit decline in revenues due to pricing pressure in US market and also because there wasn't any movement in terms of resolving the critical Halol facility.

# The Department of Pharmaceuticals (DoP), part of Ministry of Chemicals & Fertilisers, on Thursday invoked the powers under Section 3 of DPCO, 2013 to restrict stent manufacturers from withdrawing their products from the market. The move comes after NPPA, while allowing the withdrawal of Abbott Healthcare’s drug-eluting stent sold under the brand name Xience Alpine from the Indian market, blamed DoP for not accepting its request to exercise government powers under Para 3 of the DPCO, 2013 and extend restriction on the stent manufacturers from withdrawing.

# Drug maker Suven Life Sciences said it doesn't see the failure of US-based biotech startup Axovant's Alzheimer's drug in late stage clinical trials having any "bearing" on its experimental molecule SUVN-502 undergoing proof-of-concept study in US.