Stock of this pharma company has zoomed nearly 90% in last four months

In the past three months, Unichem Labs has received abbreviated new drug application (ANDA) approvals for four drugs from the United States Food and Drug Administration (USFDA)

Shares of Unichem Laboratories continued their upward march, rallying 5 per cent to hit a new high of Rs 452.95 on the BSE in Thursday’s intra-day trade.

In the past four trading days, the stock has surged 17 per cent. In the past four months, it has zoomed nearly 90 per cent. Further, in the past one year, the stock of the drug maker has seen its market price more-than-double (up 102 per cent), as compared to a 2 per cent rise in the S&P BSE Sensex.

Unichem manufactures and markets a large basket of pharmaceutical formulations as branded generics as well as generics in several markets across the world. In India, the company has strong skills in product development, process chemistry and manufacturing complex API as well as dosage forms.

In the past three months, Unichem has received abbreviated new drug application (ANDA) approvals for four drugs from the United States Food and Drug Administration (USFDA).

On October 14, the company got the nod to market a generic version of Dilantin (Phenytoin Sodium) Capsules, 100 mg, of Viatris Specialty LLC. Extended Phenytoin Sodium Capsules are indicated for the treatment of tonic-clonic (grand mal) and psychomotor (temporal lobe) seizures and prevention and treatment of seizures occurring during or following neurosurgery. The product will be commercialized from Unichem’s Ghaziabad Plant.

Earlier on August 23, the company had received approval to market a generic version of TEGRETOL® (Carbamazepine) Tablet, 200 mg of Novartis Pharmaceuticals Corp. Carbamazepine Tablets are indicated for use as an anticonvulsant drug and in the treatment of the pain associated with true trigeminal neuralgia.

While, on August 15, the company received approval to market a generic version of SEROQUEL XR (Quetiapine) Tablet, Extended Release in strengths of 50 mg, 150 mg, 200 mg, 300 mg, and 400 mg of AstraZeneca Pharmaceuticals LP. Quetiapine Extended-Release tablets are indicated for the treatment of Schizophrenia, Bipolar disorder and adjunctive treatment of Major Depressive Disorder (MDD).

On August 9, Unichem got the nod to market a generic version of NORMODYNE (Labetalol Hydrochloride) tablets, which are indicated for the management of hypertension. All these products will be commercialized from Unichem’s Goa Plant.

Unichem said the outlook for the company remains bright going by the number of products/filings filed or lined up in coming years. As the pandemic has subsided, the exceptional growth of the past in acute therapies may not be repeated, however, emerging lifestyle diseases would boost demand for chronic drugs, the company said.

“On the back of investments made so far, we expect to drive revenue growth in our businesses and even as we plan the next phase of healthcare, we are acutely conscious to ensure growth is environmentally sustainable, socially impactful and in keeping with the governance standards,” the company said in its FY22 annual report.

Meanwhile, on September 19, credit rating agency ICRA downgraded the long-term rating on the bank facilities of Unichem to [ICRA] A- (Stable) (pronounced ICRA A minus with a Stable outlook).

The rating downgrade took into account the pressure on Unichem’s margins as evident from the deterioration in profitability levels in FY22 over FY21 as well as Q1FY23 due to the ongoing pricing pressures in its key export market (US) leading to net losses on a consolidated basis in Q1FY23, ICRA said.

"After hiving off its core business of domestic formulations, which drove around 55 per cent of its consolidated revenues in FY17, Unichem has focused on the US market, supported by the ongoing capacity expansions of its manufacturing facilities. Most of its facilities are approved by the USFDA, and its growing number of ANDA filings. The rating also factors in Unichem’s backward-integrated capabilities, which have been enhanced over the past couple of years and provide a competitive advantage. We favourably note its clean track record with respect to regulatory inspections, " the rating agency said.