Pharma Stocks Outlook For The Week - 09 to 13.10.2017
Pharma Stocks Outlook For The Week - 09 to 13.10.2017
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Optimism over most pharmaceutical stocks is likely to continue next week as most negative factors like regulatory woes and pricing pressure in the US as well as the domestic market have already
been factored in. In India, re-stocking of inventory by distribution channels after the rollout of goods and services tax is likely to aid companies' earnings for the September quarter. Release of earnings over the next few weeks will keep investors on their toes and we remain optimistic over revenue growth in Jul-Sep. Performance on the revenue front is likely to pick up in 2QFY18 on the back of
one-off impact from inventory restocking in India, some key launches in the US, growth in Europe markets because of currency appreciation, and growth in emerging markets. We expect Dr Reddy's Laboratories to lead earnings growth for the quarter. In the US market, pharmaceutical companies are expected to face pricing pressure due to consolidation of distribution channels and faster regulatory approvals by the US Food and Drug Administration. We believe the new measures being
introduced by the USFDA would, over time, lower the entry barriers to even complex generics leaving generic companies even more vulnerable to pricing pressures. Over the last few months, the US drug regulator has formed a task force to offer recommendations to reduce drug prices. It recently also came up with a draft guidance to support development of generic drugs, and said it would hold
consultation to come up with measures for the same. However, any pricing pressure due to these measures has been factored in. Sun Pharmaceutical Industries will be in focus as the company awaits re-inspection of its Halol facility, which received a warning letter from the US drug regulator in December 2015. Managing Director Dilip Shanghvi, at the company's annual general meeting last week, said Sun Pharma has completed remediation process at the Halol facility and is now awaiting re-inspection by the US FDA.
Source : Cogencis Information Services Ltd.
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( www.rupeedesk.in )
Optimism over most pharmaceutical stocks is likely to continue next week as most negative factors like regulatory woes and pricing pressure in the US as well as the domestic market have already
been factored in. In India, re-stocking of inventory by distribution channels after the rollout of goods and services tax is likely to aid companies' earnings for the September quarter. Release of earnings over the next few weeks will keep investors on their toes and we remain optimistic over revenue growth in Jul-Sep. Performance on the revenue front is likely to pick up in 2QFY18 on the back of
one-off impact from inventory restocking in India, some key launches in the US, growth in Europe markets because of currency appreciation, and growth in emerging markets. We expect Dr Reddy's Laboratories to lead earnings growth for the quarter. In the US market, pharmaceutical companies are expected to face pricing pressure due to consolidation of distribution channels and faster regulatory approvals by the US Food and Drug Administration. We believe the new measures being
introduced by the USFDA would, over time, lower the entry barriers to even complex generics leaving generic companies even more vulnerable to pricing pressures. Over the last few months, the US drug regulator has formed a task force to offer recommendations to reduce drug prices. It recently also came up with a draft guidance to support development of generic drugs, and said it would hold
consultation to come up with measures for the same. However, any pricing pressure due to these measures has been factored in. Sun Pharmaceutical Industries will be in focus as the company awaits re-inspection of its Halol facility, which received a warning letter from the US drug regulator in December 2015. Managing Director Dilip Shanghvi, at the company's annual general meeting last week, said Sun Pharma has completed remediation process at the Halol facility and is now awaiting re-inspection by the US FDA.
Cadila Healthcare - Up
Auropharma - Up
Sunpharma - Up
Auropharma - Up
Sunpharma - Up
Cipla - Down
Lupin - Up
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Source : Cogencis Information Services Ltd.
