Pharma shares gain; Dr Reddy's, Alembic, Divis, Laurus Labs hit 52-wk highs

Shares of pharmaceutical companies were in focus on Monday, in an otherwise weak market, on the back of a slew positive corporate announcements. Dr Reddy’s Laboratories, Alembic Pharmaceuticals, Divis Laboratories and Laurus Labs were trading at their respective 52-week highs at the bourses on Monday.

At 12:06 pm, the S&P BSE Healthcare index was the top gainer among sectoral indices, and was up 1.1 per cent. In comparison, the benchmark S&P BSE Sensex was trading 0.43 per cent lower. The healthcare index was trading at its highest level since May 3, 2019.

Wockhardt, Strides Pharma Science, Alembic Pharmaceuticals, Pfizer and IOL Chemicals & Pharmaceuticals were up in the range of 5 to 9 per cent in the intra-day trade today. Further, Dr Reddy’s Laboratories, GlaxoSmithKline Pharmaceuticals, Astrazencea Pharma India, Laurus Labs, Novartis India, Dr. Lal PathLabs and Sanofi India, Lincoln Pharmaceuticals and Aurobindo Pharma from the index were up between 3 and 4 per cent.

Among the individual stocks, Dr Reddy’s Laboratories moved higher by 3 per cent to Rs 3,111, bouncing back 4 per cent from its intra-day low of Rs 3,002, on the BSE after the company reported strong margins improvement in the December quarter.

The company’s earnings before interest, tax, depreciation and amortisation (EBITDA) improved 200 basis points to 24.5 per cent in Q3FY20 from 22.5 per cent reported in the year ago quarter. The profits were impacted due to trigger based impairment charge taken on a few products including gNuvaring, the company said.

It posted a consolidated net loss of Rs 570 crore in Q3FY20, on account of Rs 1,320 crore on impairment of non-current assets. It had reported a net profit of Rs 485 crore in the previous year quarter.

Besides, Wockhardt rallied 9 per cent, to Rs 325 on the BSE, on the back of heavy volumes. The stock has surged 39 per cent thus far in the month of January as against a 0.45 per cent rise in the Sensex.

On January 16, the company announced that it has received approval from the country’s drug regulator to market Emrok IV and Emrok (oral) which would treat acute bacterial skin infections, including diabetic foot infection, caused by the super bug methicillin-resistant staphylococcus aureus (MRSA). Their launch is expected in the next few months and will be primarily used on critically-ill patients.

Furthermore, Strides Pharma Science soared 6 per cent to Rs 442 in the intra-day trade today on the back of the company announcing that its formulation facility at Alathur, Chennai underwent the US Food and Drug Administration (USFDA) inspection which concluded with “Zero 483 observations”. The facility recently completed a significant capacity expansion which will support the growth momentum for the US business, the company.

In a separate exchange filing, Strides said the USFDA has approved the company’s triamcinolone acetonide ointment, which is used to treat various skin infections.

Alembic Pharma, too, hit a 52-week high of Rs 633, up 7 per cent today. Last week, the company had said that it received the US drug regulator's approval for Bosentan tablets, 62.5 mg and 125 mg, indicated for the treatment of pulmonary arterial hypertension (PAH) (WHO Group 1).

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