Indian pharmaceutical giant Sun Pharma shares are rallying in the intraday trading session on Friday, September 27. The Mumbai-based pharma company's shares saw a rise of over 2 per cent in the early half of the trading session.
These developments come to pass after news emerged that as many as 53 drugs failed the quality test conducted by the Central Drugs Standards Control Organisation (CDSCO). Some of the drugs were commonly used, over-the-counter drugs like Paracetamol.
As per reports, Sun Pharma’s Ursocol 300 was flagged as well.
These drugs were deemed to have failed the quality test, with the CDSCO issuing a 'Not of Standard Quality' (NSQ) Alert.
UBS Issues Buy Rating
The company shares, however, found a boost in ratings issued by brokerage firms. UBS' brokerage arm, which issued a 'Sell' call for major pharma companies, including Zydus, Aurobindo and Lupin, initiated a 'Buy' call for the Mumbai-based Sun Pharma. UBS issued a Buy call with a target Rs 2,450 per share.
Most crucially, the list of failed drugs also included over-the-counter drugs like antiacid Pan-D, Paracetamol tablets (IP 500 mg) |
UBS anticipates Sun Pharma’s patented molecules to double in revenues over four years, In addition, UBS also expects the company's margin to expand by 650 basis points. In addition, the report also expects an overall compound annual growth rate or CAGR, of 19 per cent.
Sun Pharma Shares
The company shares, which opened at Rs 1,917.95, touched the high of Rs 1,949.80 per share. The progress of the shares went past the 2.3 per cent, before appearing down slightly.
Sun Pharma shares, which gained 3.43 per cent in the past 5 trading sessions, surged further by 2.08 per cent or Rs 39.45. This took the overall value of each individual share to Rs 1,937.85.
Drugs Fail Test
The failed tests included some crucial medicines, including Vitamin C and D3 tablets Shelcal. It also included vitamin B complex and vitamin C softgels. Most crucially, the list of failed drugs also included over-the-counter drugs like antiacid Pan-D and Paracetamol tablets (IP 500 mg). Other drugs, like the anti-diabetic drug Glimepiride and the high blood pressure drug Telmisartan, also failed the test.
