Views on Dr Reddy's restrained from selling generic drug Nexium in US market: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research - Pharma, Angel Broking):

Dr Reddy's restrained from selling generic drug Nexium in US market:

"In an order passed by the District Court of Delaware, USA, Dr Reddy's has granted a Temporary Restraining Order (TRO) with immediate effect on sales, delivery, transfer, or other disposition of its generic esomeprazole product in the US market. The order came about as a result of a motion moved by Astra Zeneca objecting to the usage of the colour Purple in the said generic product.

The order has been passed pending further hearing or trial. The Court has asked the parties to propose a next course of action and submit the same to the court. The court shall conduct a telephonic status conference on Thursday, November 12, 2015. The Company is said to have compiled with the order of the Court and simultaneously evaluating all possible options to resolve the matter at the earliest. While we believe that the issues is not that big, given that it involves, only colour issue. However, in worst case scenario we had factored in sales of US$ 30-50mn for the product, leading to the EPS impact of Rs 1-2. We remain NEUTRAL on the stock."

Shares of DR.REDDY'S LABORATORIES LTD. was last trading in BSE at Rs.3336.3 as compared to the previous close of Rs. 3504.6. The total number of shares traded during the day was 189479 in over 17378 trades.

The stock hit an intraday high of Rs. 3494.9 and intraday low of 3304. The net turnover during the day was Rs. 640195773.

Source : Equity Bulls

Keywords