Shares of Sun Pharmaceutical Industries and Sun Pharma Advanced Research Company (SPARC) rallied 9-10 percent intraday on Wednesday to hit record highs of Rs 1,035 and Rs 448.80, respectively. SPARC, the subsidiary of pharma major, has received approval from US Food and Drug Administration (USFDA) for antiepileptic drug.
“The USFDA has approved its new drug application (NDA) for Elepsia XR (Levetiracetam extended-release tablets 1000 mg and 1500 mg),” says SPARC in its filing to the exchange.
Elepsia is indicated for adjunctive therapy in the treatment of partial onset seizures in patients 12 years of age and older with epilepsy.
“Levetiracetam is a very successful and highly effective antiepileptic drug, says Anil Raghavan, chief executive officer of SPARC.
The product will be manufactured by Sun Pharmaceutical Industries at its Halol (Gujarat) facility in India.
Brokerage house Macquarie says this is the first approval Sun Pharma has received at its Halol facility post receiving a Form-483 from the US FDA in September 2014. “Satisfactory closure of the Form 483 at Halol is the biggest trigger/overhang near-term given it contributes around 20 percent of US sales,” it adds.
The brokerage says, according to SPARC, the peak sales potential for SPARC in the US could be around USD 30-50 million.
With strong execution, free cash flow generation (more than USD 900 million per year) and a niche pipeline, Macquarie believes Sun Pharma should sustain the upper end of its historical premium valuation.
The acquisition of Ranbaxy provides an additional lever for growth over the medium term, whose potential is not adequately factored in by the street, according to the report.
At 14:22 hours IST, the scrip of Sun Pharma was quoting at Rs 1,017.05, up 7.92 percent and SPARC was quoting at Rs 441.85, up 7.31 percent amid high volumes on the Bombay Stock Exchange.
Posted by Sunil Shankar Matkar