Pharma Stocks Outlook: Select frontline shares seen up next week

[K.Karthik Raja]

Pharma Stocks Outlook: Select frontline shares seen up next week

Likely weakness in broad market next week may lead to buying in
select pharmaceutical shares as defensive bets.
Ranbaxy, Sun Pharmaceutical Industries, and Cipla are seen strong
on the charts. Dr Reddy's Laboratories looks weak on the chart but any
downside in the stock looks limited. The stock may see
sideways movement, after a 12.7% drop this week.
The Hyderabad-based company had reported a net loss of 846.6 mln
rupees for Oct-Dec, as per U.S. accounting standards.
Cipla is seen strong on the charts but reports of Roche seeking
the High Court's stay to prohibit the company from selling anti-cancer
drug Erlotinib in India may dampen the sentiment for the stock next
week,
Ranbaxy and Sun Pharma look strong on the charts also for fundamental
reasons.
This week, shares of Sun Pharma, which reported 3.1-bln-rupee net
profit for Oct-Dec, have surged while the Ranbaxy stock is seen
bottoming out with the further downside being capped.
Glenmark Pharma, which announced the termination of its agreement
with Merck Serono today on diabetic molecule GRC 8200, could see
further weakness next week.The termination of the agreement may lead
to increased research expenditure if Glenmark Pharma is unable to out-
license the molecule to another company, impacting the potential
revenue mile-stones adversely.

Friday's closing share prices, in rupees, of leading
pharmaceutical
companies on National Stock Exchange, compared with a week ago:

Company Feb 1 Jan 25 %
Change
.
Cadila Healthcare 256.85 265.15
(-) 3.3
Cipla 196.40
183.35 7.1
Dr Reddy's Laboratories 527.05 603.85
(-)12.7
GlaxoSmithKline Pharma 855.50 876.30 (-) 2.4
Pfizer 638.45
666.60 (-) 4.2
Ranbaxy Laboratories 359.25 369.25 (-)
2.7
Sun Pharmaceutical Industries1,119.00 976.15 14.6
.
BSE Healthcare Index 3642.71 3691.98 (-) 1.3
Nifty 5317.25
5383.35 (-) 1.2
Sensex 18242.58 18361.66
(-) 0.6