Lupin falls nearly 5% on Mylan drug launch, Credit Suisse downgrade

NEW DELHI: Shares in Lupin Ltd slump nearly 5 per cent following the launch of rival Mylan Inc's generic version of the cholesterol-lowering Tricor tablets.

Earlier in the day, Credit Suisse downgraded Lupin from ‘outperform’ to ‘neutral’ rating as risk reward appears unfavourable. The brokerage firm has upped the price target from Rs 710 earlier to Rs 755.

At 11:00 a.m.; Lupin was trading 3.9 per cent lower at Rs 772. It hit a low of Rs 765.65 and a high of Rs 808.80 in trade today.

Mylan Inc said in a statement on Friday that its unit Mylan Pharmaceuticals Inc has shipped generic Tricor, or fenofibrate tablets, of 48 mg and 145 mg. Mylan competes against Lupin, which also sells generic versions of Tricor.

Credit Suisse said that with Mylan entering generic Tricor on 17 may 2013, it may hit earnings momentum. Credit Suisse expects only 15 per cent EPS CAGR over the next two years.

"Mylan's launch of Tricor will result in higher competition and decline in Lupin's market share in a drug which has a market size of $1.2 billion," said Ranjit Kapadia, senior vice president at Centrum Broking.