Back‘Sputnik V to generate $650mn for Dr Reddy’s’
Dr Reddy’s ₹1,850-crore acquisition of Wockhardt’s branded India business earlier this year is expected to provide the vaccine marketing and distribution muscle that will help save 8-10% of the cost of distribution
PremiumDr Reddy’s Laboratories is expected to leverage infrastructure recently acquired from Wockhardt for distributing the Sputnik V vaccine in India if it gets the regulator’s nod, potentially fetching it as much as $650 million, international brokerage Sanford Bernstein said.
“We estimate (about) 30 million doses that they might be able to provide the government and the remaining 70 million doses to be available later in the private market. We also estimate $3/dose in the public market and $8 in the private market. That gives us an incremental topline of $650 million," Bernstein said in a report on Thursday.
Bernstein expects Dr Reddy’s to have gross margins of around 25%, it said.
Dr Reddy’s ₹1,850-crore acquisition of Wockhardt’s branded India business earlier this year is expected to provide the vaccine marketing and distribution muscle that will help save 8-10% of the cost of distribution if the company had not acquired the business, Bernstein said.
The international brokerage has raised the target price of the company’s shares marginally to ₹5,662 per share from ₹5,606 while maintaining its outperform rating on the stock. Shares of Dr Reddy’s closed at ₹5,230.15 on Friday, up 3.06% from Thursday’s close.
On the government’s plans to vaccinate 300 million high-risk individuals by August, Bernstein said, “We believe the remainder of the population can access the vaccines in the private market after these capacities are secured."
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