Dr. Reddy's shares spike after favourable generic drug ruling
New Delhi: Shares of Indian drugmaker Dr. Reddy's Laboratories Ltd jumped nearly 9 per cent on Wednesday, their sharpest intraday gain in a year after a U.S. court allowed the company to sell a copycat version of Indivior Plc's opioid treatmentSuboxone Film.
The U.S. Court of Appeals for the Federal Circuit lifted a preliminary injunction that blocked Dr. Reddy's from selling the generic, saying a lower court judge erred in granting the request. Shares of Indivior tanked about 47 per cent on Tuesday, in a record single-day fall.
"As a result of today's ruling, Dr. Reddy's will resume its launch activities as soon as permitted," the Hyderabad-based generic drugmaker said late on Tuesday.
Investors welcomed the news, with shares of Dr. Reddy's reaching their highest in nearly two months - 2,655 rupees.
Close to 2.5 million shares had changed hands by 0437 GMT, more than triple the 30-day average of about 788,000 shares.
The stock was the top percentage gainer on the NSE index, which was down 0.7 per cent, and helped the Nifty pharma index rise by 1.3 per cent.
Jefferies analysts said they consider the ruling to be near-term positive, and one that allows the company to immediately re-launch the product, but still at-risk.
Nomura analysts said they believe DR. Reddy's is likely to be compensated in due course for the preliminary injunction, but await clarity whether the compensation could be higher than $72 million.