Shares of Glenmark Pharmaceuticals surged 40% on Monday to the touch its 52-week high of ₹572.70 apiece as investors cheered the drug maker’s launch of an oral antiviral for treatment of covid-19 patients with mild to moderate symptoms.
Glenmark Pharmaceuticals on Saturday launched antiviral favipiravir, under the name FabiFlu, for the treatment of covid-19 patients at a price of about ₹103 per tablet. The drug are going to be available as a 200 mg tablet at a maximum retail price of ₹3,500 for a strip of 34 tablets, Glenmark Pharmaceuticals said. FabiFlu is that the first oral favipiravir approved medication in India for the treatment of covid-19, it added.
Analysts said it’s very difficult to estimate the financial impact at this stage considering uncertainty over potential covid-19 patients and its longevity. consistent with analysts at ICICI Securities, the dosage translates into maximum treatment cost of ₹12,566 per patient.
“We maintain our estimates and lift target price to earnings (PE) to fifteen times from 12 times to think about potential upside from Favipiravir and powerful research and development (R&D) capability,” ICICI Securities said. It added that regulatory hurdles and competitive pressures within the US might be downside risks.
The stock currently trades at valuations of 14.4 times on FY21 and 12.6 times FY22 earnings and enterprise value EV/EBITDA multiple of seven .9 times FY21 times and seven .1 times FY22.
According to ICICI Securities, US revenues of Glenmark would gradually proportion with new launches. “This would aid margin expansion in tandem with cost control measures that are implemented. Company would even be ready to strengthen its record by reducing debt with cash infusion from the strategic partner in Ichnos Sciences (innovative wing) and sale of non-core assets,” said ICICI Securities.
This year, Glenmark shares have risen 53.16% so far, beating benchmark Nifty Pharma which gained 26.53%. In June, Glenmark stocks have surged nearly 50%. Currently, Glenmark has 21 buy ratings, eight hold and two sell ratings by analysts on Bloomberg.
Glenmark had received the Drug Controller General of India’s (DCGI) nod to conduct phase-3 clinical trials with oral antiviral favipiravir among covid-19 patients in early May. Favipiravir has been under compassionate use in Japan and 2050 patients have already been administered for clinical use and high recovery rates were observed at 7 and 14 days of treatment. it’s also been approved by Italy and China for experimental/compassionate use in covid-19 patients.
Favipiravir also can be utilized in patients with co-morbid conditions like diabetes and heart condition because it has wide therapeutic margin of safety .
Earlier last month, Glenmark had announced that it had been conducting another clinical test to guage the efficacy of two antivirals favipiravir and umifenovir as a mixture therapy in moderate hospitalised adult covid-19 patients in India