Stock Watch

By Lakshmi P, Myiris.com

With the BSE Sensex crossing the 10,000 mark, the healthcare index has also gone up by 13 percent in one month to close at 3605.78 on February 21, 2006. Pharma stocks, which were under the weather, have started gaining momentum.

Indian pharma companies have become increasingly ambitious as the pharma industry witnessed a series of overseas acquisitions. In a major development, Dr Reddy’s Laboratories and 3i, Europe’s leading private equity house have acquired 100 percent of Betapharm Group for Euro 480 million. Betapharm is the fourth-largest generic pharmaceuticals company in Germany. The company markets high-quality generic drugs, with focus on long-term therapy products with high prescription rates.

Ranbaxy, which was in the race for the same acquisition, fell during the week. Dr Reddy’s shot up 29 percent in one month to close at Rs 1331.80 on February 20, 2006. Ranbaxy gained 15 percent in a month to close at Rs 438.35 on February 20, 2006.

Lupin was another stock, which saw major action this fortnight. The pharma company was in the news for several reasons. The company’s US-based subsidiary, Lupin Pharmaceutical has ended an agreement with Cornerstone Biopharma for the distribution of its antibiotic Suprax. Lupin plans to sell the drug on its own from April. Due to healthy sales in the US, Lupin is also in talks with a manufacturing and distribution company in Australia to float a marketing joint venture. The JV will mark Lupin's entry into Australian markets with its branded generics.

Lupin is setting up a formulations plant in Jammu to make finished dosage forms of medicines. At Rs 26 crore, the plant would support increased demand from developing markets. The company posted an 80 percent growth in net profit at Rs 44.2 crore for the third quarter ended December 31, 2005 as compared to Rs 24.5 crore for the quarter ended December 31, 2004. Total income (net of excise) also increased 49 percent to Rs 436.51 crore. Lupin stock has gained 18 percent in a month to close at Rs 939.05 on February 20, 2006.