BackWhy Divi's labs shares have surged 10% today
The pharma stock, which is trading as the top Nifty gainer, is in focus as the company is MSD's authorised manufacturer for Molnupiravir API
PremiumShares of pharmaceuticals company Divis Laboratories surged 10% to hit a 52 week high level of ₹5,315 per share on the BSE in Monday's early trading session. The pharma stock, which is trading as the top Nifty gainer, is in focus as the company is MSD's authorised manufacturer for Molnupiravir API.
Molnupiravir drug is found to reduce the risk of hospitalisation or death by approximately 50% of those most at risk of contracting Covid-19, showed a planned interim analysis of data from phase 3 clinical trials by Merck. The pharma giant said molnupiravir also demonstrated consistent efficacy across SARS CoV2 variants Gamma, Delta, and Mu.
Merck and partner Ridgeback Biotherapeutics last week said they plan to seek US emergency use authorization for the covid pill as soon as possible and to make regulatory applications worldwide. If it gets authorization, molnupiravir, which is designed to introduce errors into the genetic code of the virus, would be the first oral antiviral medication for COVID-19.
In May this year, Divi's Labs had inform that the company is MSD's Authorized manufacturer for Molnupiravir API and is allowed to supply this API to MSD's VL partners in India. US-based pharma major Merck is known as MSD outside the United States and Canada.
“Divislab is witnessing a big rally amid news that Merck to seek emergency authorization for oral Covid treatment after compelling results in Molnupiravir. Divislab is the biggest beneficiary of this news because Divis lab is a manufacturer of Molnupiravir. Divislab is one of our top pick in the Pharma API space because of its quality management, strong market share, and impressive financials," said Santosh Meena, Head of Research, Swastika Investmart Ltd.
Technically, Meena added that the stock is in a strong uptrend where it is bouncing back from a strong demand zone of ₹4750-4650 after a small correction. “5400-5500 may act as an immediate resistance zone but it has the potential to move towards the 6000 mark in the near term," he said.
Shares of generic drugmakers Cipla, Sun Pharma, Dr Reddy's Laboratories and Torrent Pharmaceuticals, which are jointly conducting a clinical trial in India with molnupiravir, also gained in trade.
Divi’s is a leading manufacturer of Active Pharmaceutical Ingredients (APIs) in the world with offering over 25 products commercially. The pharma stock has surged 67% in a year and is up around 35% this year (year-to-date or YTD) so far.
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