Tuesday, August 11, 2009

Select Pharma Stocks Gain On Tamiflu Demand

. Tuesday, August 11, 2009

By stockOzone team

As the Government is looking at ramping up procurement of the generic version of Tamiflu (oseltamivir), the share prices of those Indian pharma companies which might begin producing the drug, surged on Tuesday.

The share prices of these companies gained between two per cent and 19 per cent.

As the virus has reached pandemic levels with the death toll rising to ten and a large number of people having tested positive across the country, the Government is looking at stockpiling about another two crore capsules of the drug. Tamiflu is currently being imported from Swiss drug maker, Roche.

Ranbaxy, Cipla, Natco Pharma, Strides Acrolabs and Panacea Biotech are vying to produce the generic version of the drug.

Spike in prices
Strides closed up 4.78 per cent, Ranbaxy 6.71 per cent, Panacea Biotech 1.59 per cent and Natco Pharma 18.93 per cent. Though Cipla closed the day down 0.48 per cent, it was up more than three per cent during the day.

Ms Sarabjit Kaur Nagra, V-P Research (Specialist-Pharmaceuticals) at Angel Broking, said the spike in the share prices was purely sentimental. “The number of people diagnosed with the virus is very small and this will not impact the profits of the companies in a substantial manner,” she said.

Mr Jagannadham Thunuguntla, Equity Head at SMC Capital said that the Government looking at stocking up the drug immediately would boost the reputation of these companies. “This will not impact the bottomlines of these companies much.”

The Swine flu virus, which emerged in Mexico and the US first in April, has been spreading to other countries.

It is a global pandemic which has hit India much later than other countries. Globally more than 1.6 lakh people have been affected and 1154 deaths have been recorded, according to the World Health Organisation.

The swine flu scare didn’t seem to affect the stock markets much as it ended the day flat; the Sensex closed up 64 points. The BSE Health Care index was up 0.95 per cent, as 14 scrips advanced and 8 declined on Tuesday.

Disclosure: Author does not own any of the stocks discussed here.

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