BackDr Reddy’s jumps 5.5% on launch of new drug in the US
The company said it has launched the generic version of AstraZeneca Plc's gastric acidity drug Nexium in the US
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Hyderabad/Mumbai: Shares of Dr. Reddy’s Laboratories Ltd gained as much as 6.3%, the most in four years, after the company said it has launched the generic version of AstraZeneca Plc’s gastric acidity drug Nexium in the US.
This is the most-awaited US launch for Dr. Reddy’s and the drug is expected to be a key growth driver in the coming quarters.
The company, India’s second largest drug maker, said it has launched 20 mg and 40 mg capsules on 25 September, followed by the approval of US Food and Drug Administration (USFDA).
Nexium, known chemically as esomeprazole, is a proton pump inhibitor used to reduce acid in the stomach to treat gastroesophageal reflux disease (GERD).
During the day, Dr. Reddy’s shares touched a high of ₹ 4,222.75, amid high volumes. The stock has gained over 28% in the year so far.
“The product is expected to contribute around $30-50 million in sale for the rest of this financial year," said Sarabjit Kour Nangra, vice president, research – pharma at Mumbai-based brokerage house Angel Broking Ltd.
Nexium has brand and generic sales of approximately $5.2 billion for the 12 months ending July 2015, according to US-healthcare information provider IMS Health.
The US patent on Nexium expired in May. Ranbaxy Laboratories Ltd held the first-to-file approval for the drug, which allowed it 180 days of marketing exclusivity. But in November, USFDA revoked the approval, citing the company’s non-compliance with the agency’s manufacturing quality standards.
Ranbaxy was acquired by rival Sun Pharmaceutical Industries Ltd in March.
Teva Pharmaceutical Industries Ltd launched Nexium copycat version in January this year.
Shares of Dr. Reddy’s Laboratories closed 5.54% higher at ₹ 4,191.85 apiece on BSE.
Other mid-cap healthcare companies also rose. Neuland Laboratories Ltd rose 11.12%, Claris Lifesciences Ltd 5.25%, SMS Pharmaceuticals Ltd 8.05%, Anuh Pharma Ltd 5.91%, Natco Pharma Ltd 5.06%, Unichem Laboratories Ltd 1.03%, Dishman Pharmaceuticals and Chemicals Ltd 2.43%, Vivimed Labs Ltd 4.51% and Marksans Pharma Ltd 0.97%.
However, Sun Pharmaceuticals Industries Ltd fell 3.42%, while Sun Pharma Advanced Research Co. Ltd dropped 2.62% after the company said in a notice to BSE that the US FDA revoked an approval issued to the company, citing quality issues at its production site.
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