Summary
of Contents
STOCK UPDATE
Lupin Cluster: Apple
Green Recommendation: Buy Price target: Rs670 Current
market price: Rs582
USFDA nod for
Trandolapril
Key
points
-
Lupin has obtained a tentative
approval from the US Food and Drug Authority (USFDA) for its
abbreviated new drug application for Trandolapril tablets of
strengths 1mg, 2mg and 4mg. Trandolapril is prescribed for the
treatment of hypertension.
-
Abbot Laboratories Plc, USA is the
innovator of Trandolapril, which is sold under the brand name
Mavik®. The annual sales of the product in the USA stood at
approximately $53 million for the twelve months ended July 2006,
based on IMS data. The product patent expires in June 2007.
-
Lupin would launch the generic
equivalent of the Mavik® tablets in US markets on receiving the
final approval from the USFDA. The final permission is expected
upon the expiry of the patent protection for the branded product
in June 2007.
-
Anticipating a 25% market share
for Lupin at a 30% price erosion, we expect the product to
generate revenues worth Rs27.8 crore (for the eight months after
the expiry of the patent in June 2007) in FY2008.
- At the current market price of Rs582, Lupin is
quoting at 14.9x its FY2008E earnings estimate, on a fully diluted
basis. Keeping in mind the strong business fundamentals and growth
potential of the company, we maintain our Buy recommendation on
the stock with a price target of Rs670.
VIEWPOINT
Great
Offshore
Follow the leader Great Offshore Ltd (GOL), the de-merged offshore
business of the Great Eastern Shipping Company, is likely to get
listed tomorrow. The de-merger has been a step towards unlocking the
value of the offshore business that commands much higher multiples
as compared with the shipping business. More so in the current
scenario where the heightened exploration activity globally is
resulting in firming up of the charter rates for offshore drilling
and offshore support vessels, and the other allied
services. |