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Business News/ Markets / Stock Markets/  Pharma stock falls 15% this year. Why Motilal Oswal has 'Buy' tag

Pharma stock falls 15% this year. Why Motilal Oswal has 'Buy' tag

Motilal Oswal believes the pharma company is well-placed to gain from the drug shortages in the US


Gland Pharma has a decent opportunity size for injectable drugs under shortages to drive near term growth. In the medium-term, its launch momentum, filing pace, upside from recently launched products in the US, and the new Enoxaparin contract is expected to drive 16% sales CAGR in its core markets over FY22-24, as per Motilal Oswal.

Gland Pharma has 19 ANDAs approved in FY22, which provides near-term support to sales in its core markets, with further ongoing support from the new Enoxaparin sourcing deal, highlighted the brokerage and research firm in a note.

Motilal Oswal has a buy tag on the pharma stock with a target price of 4,040 apiece as it believes the company is well-placed to gain from the drug shortages in the US. Gland Pharma shares have declined about 15% in 2022 (YTD) so far, whereas the stock is up about 79% since its listing in November 2020.

The overall number of drugs under shortage in the US has declined to a 15-year low at present. However, the number of injectables facing a shortage is at its 20-year average, but is at a record high as a percentage of total drug shortages.

Among the Indian players present in the US, Gland appears to be the largest beneficiary from drugs under shortages due to consistent compliance and manufacturing capacity/capabilities, said the brokerage.

“We remain positive on Gland Pharma given its niche product pipeline in injectables, volume gains in existing products, wider market operations for its portfolio, a strong cash cushion for inorganic growth, and consistent compliance," Motilal Oswal added.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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Updated: 20 Apr 2022, 12:47 PM IST
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