Pharma Stocks Outlook for the week – 26 to 30.12.2016
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The shares of pharmaceutical companies are likely to trade mixed next week, with most stocks weak and moving near their support levels. Pharmaceutical stocks have been weak over the medium term due to regulatory concerns surrounding key companies, as well as pricing pressure in the US and in India. In India, reports that the National Pharmaceutical Pricing Authority will soon cap the prices of stents have led to concern about further pricing pressure for drugs. This was sending a clear message to pharmaceutical companies that profiteering wouldn't be tolerated. In the US, the biggest market for most pharmaceutical firms in terms of revenue, consolidation of distribution channels has also put significant pressure on the pricing power of companies. Sun Pharmaceutical Industries, which gets nearly half its revenue from the US, is expected to find support at 600-620 rupees. The sharp decline in the Sun Pharmaceutical Industries stock this month is due to issuance of Form 483 for its Halol facility by the US Food and Drug Administration for not complying with good manufacturing practices. Cadila Healthcare, which was the worst hit this week, is expected to continue its downward momentum next week as well.
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Pharma Stocks Outlook for the week – 26 to 30.12.2016
The shares of pharmaceutical companies are likely to trade mixed next week, with most stocks weak and moving near their support levels. Pharmaceutical stocks have been weak over the medium term due to regulatory concerns surrounding key companies, as well as pricing pressure in the US and in India. In India, reports that the National Pharmaceutical Pricing Authority will soon cap the prices of stents have led to concern about further pricing pressure for drugs. This was sending a clear message to pharmaceutical companies that profiteering wouldn't be tolerated. In the US, the biggest market for most pharmaceutical firms in terms of revenue, consolidation of distribution channels has also put significant pressure on the pricing power of companies. Sun Pharmaceutical Industries, which gets nearly half its revenue from the US, is expected to find support at 600-620 rupees. The sharp decline in the Sun Pharmaceutical Industries stock this month is due to issuance of Form 483 for its Halol facility by the US Food and Drug Administration for not complying with good manufacturing practices. Cadila Healthcare, which was the worst hit this week, is expected to continue its downward momentum next week as well.
