Gujarat drug firms continue to gain ground

The stock prices of pharmaceutical majors of Gujarat have record new peaks in the current month.

Rising export opportunities, increasing USFDA patents, steps taken for the post-patent regime and an overall increase in profitability have contributed to the uptrend.

All the three major listed pharmaceutical companies of Gujarat "" Zydus Cadila Healthcare Ltd, Torrent Pharmaceuticals Ltd and J B Chemicals and Pharmaceuticals Ltd "" have shown a steady climb in their stock prices on the Bombay Stock Exchange (BSE) over the past few months to peak in December.

Ahmedabad-based Zydus Cadila Healthcare has recorded a decade-high in December with the stock price touching Rs 422 on December 17. The highest was Rs 422 on December 17 and the lowest Rs 114 on May 13 this year.

"The growth across the industry has been good and with acquisitions and new markets opening up for Zydus, the effect is being seen on the stock prices," said a company official.

He said the company expected the stock value to go up even higher as the pharmaceutical industry was growing at a very healthy rate.

The company has appointed David Blanksby as the vice president for Europe.

"Our goal is to tap the opportunities for growth in the European market by establishing ourselves in France, Germany, the UK, Italy and Spain. The recent acquisition of Alpharma France takes us closer to this goal," an official said.

As for J B Chemicals, from a 52-week low of Rs 148.15, the stock has climbed to a 52-week high of Rs 386 on December 10.

J B Pharma stocks prices had been as low as Rs 70 just about two years ago, after which they have been steadily rising.

Increasing export opportunities, new USFDA patents and tie-ups with European companies for marketing drugs and an overall growth in the sector has contributed to this, company officials said.

JBCPL, a strong player in the over-the-counter (OTC) segment in Russia and the CIS countries, has now started looking for a base in the UK from where the company will spread its network in other European countries.

In less than nine months, the stock value of Torrent Pharmaceuticals Ltd has shot up almost three times. On March 31, stock prices of Torrent Pharma stood at Rs 157, which was the 52-week low.

On December 18, Torrent Pharma stock prices stood at Rs 434. Torrent Pharma has initiated its operations in Germany with a subsidiary, Torrent Pharma GmbH.

"Looking at the tremendous opportunities in pan-European markets for generics and Torrent's research and development capabilities, the Company expects to reap rich dividends in this market in the future and the company has already invested 1.55 lakh euros as capital contribution in Torrent Pharma GmbH," a company source said.

Fore Europe, Torrent has chosen the method of forming alliances with large players for selected molecules by providing them with product registration dossiers and tying these with long-term supply contracts both for the active pharmaceutical ingredients (API) and finished formulations.