GOLDEN RULES FOR TRADING

Pharma Stocks Outlook for the week – 21 to 25.03.2016 Government drug ban case hearing outcome in focus

Pharma Stocks Outlook for the week – 21 to 25.03.2016
Government drug ban case hearing outcome in focus

Outcome of the Delhi High Court hearing on the recent government order banning 344 fixed dose
combination drugs on Monday will set the trend for stocks of pharmaceutical companies next week.
In an unprecedented move, the Drug Controller General of India, under the Ministry of Health and
Family Welfare, on Mar 12, banned sale and distribution of 344 fixed dose combination drugs with
immediate effect, citing safety concerns and availability of safer alternatives.

Household names such as Corex and Phensedyl cough syrups, Vicks Action 500, Crocin Cold and Flu, D-cold Total, and Panderm Plus are under the ambit of the government ban. A number of pharma companies moved the Delhi High Court against the government's ban and were able to get an interim stay on the order. The next hearing in this case is on Monday, which will be crucial for the sector.

The ban order rattled pharma stocks with Pfizer, which sells Corex cough syrup, falling 16% this
week. The Nifty Pharma Index was down 5% on week. Market research firm AIOCD-AWACS said
in a report that Abbott Healthcare, Pfizer, Macleods Pharmaceutical, Ipca Laboratories, and
Wockhardt will be impacted the most by the ban order.

Lupin was also one of the worst performing stocks in the pharma space this week, falling 16%, as the
US Food and Drug Administration made nine observations relating to deviations from good
manufacturing practices at its Goa unit following a recent inspection. The company's spokesperson
said the observations are on inadequacy and non-adherence to standard operating procedures.