A number of brokerages applauded the US FDA’s approval of the asthma inhaler Spiriva and anticipate that it will help Lupin’s margin recovery in the medium run.
The US Food and Drug Administration granted the long-awaited final approval for Indian pharmaceutical company Lupin’s generic version of Boehringer Ingelheim’s Spiriva Handihaler (Spiriva) on June 21, providing comfort to the business that has been experiencing diminishing profits.
Analysts predict that Lupin’s generic bronchial asthma inhaler, which will be the first to hit the market, will have large margins and little competition.
The firm, which has its headquarters in Mumbai, has seen a decline in margins over the past few years, which has affected its financial performance. The introduction of Spiriva, which is anticipated to reduce the medium-term margin pressure for Lupin, was widely watched by analysts and stakeholders. On June 21, the stock increased by more than 5% in response to the FDA approval news.
Lupin was, however, down 4.26 percent at midday on June 22 at Rs 837.80 on the National Stock Exchange as investors took some of the previous day’s gains as profits.
The approval, according to Kotak Institutional Equities, which anticipates that Spiriva will launch soon, will increase transparency on Lupin’s US sales trajectory while supporting margin recovery over the medium term.
The firm increased its price estimate for the pharmaceutical company by around 14% to Rs 815.
Axis Securities also called attention to Lupin’s most recent introduction of the generic form of darunavir in the US market, where it has a 180-day window of exclusivity. The generic versions of Spiriva and Darunavir, according to Lupin, “we believe both of these products (generics of Spiriva and Darunavir) could increase the gross margins of Lupin by 100 basis points in the next two years,” the company stated in its report.
