Lupin gains on USFDA nod; Goldman recommends 'Buy'

NEW DELHI: Shares of drugmaker Lupin rose nearly 2 percent after it received the US regulatory approval on Tuesday to launch oral contraceptive tablets Norethindrone.

The tablets are generic version of Watson Pharmaceuticals’ brand Nor-QD and have annual sales of about $52 million in the US.

According to sources, the market size for Norethindrone is closer to $70 mn.

This is Lupin’s first approval from 26 filings made in the oral contraceptives segment, which has market size of over $4.5 billion in the US. Sources suggest the company is expected to get 2-3 more approvals in oral contraceptives by Q2FY13.

At 11:17 a.m., the stock was up 1.5 per cent at Rs 489.85.

Brokerage Call:

Goldman Sachs recommends ‘BUY’ on Lupin Ltd with a price target of Rs 518.

According to the brokerage, revenues from the drug will start making a material contribution to Lupin’s FY2012E revenues. The company is best positioned to penetrate the oral contraceptive market in the US which is estimated around $3.7 billion.

RBS has also penciled in revenues of $30m from oral contraceptives for FY13 for Lupin Ltd.

Analysts Call:

Lupin looks strong in the pharma space. If the stock trades well above Rs 490, which is its major resistance level, the stock might retest its earlier high levels of Rs 520.

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