Pharma Stocks Outlook for the week – 21 to 25.03.2016
Government drug ban case hearing
outcome in focus
( www.rupeedesk.in )
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.