Lupin up 2%, hits new high on buying Eli Lilly's diabetes drug Huminsulin

The stock of the pharmaceutical company, Lupin is quoting higher for the sixth straight trading day; it has rallied 10 per cent during the period

Shares of Lupin hit a new high of Rs 2,361.95, gaining 2 per cent on the BSE in Tuesday’s intra-day trade in an otherwise weak market after the company said it has acquired Huminsulin in India from Eli Lilly to further enhance its diabetes portfolio.  The stock of the pharmaceutical company is quoting higher for the sixth straight trading day; it has rallied 10 per cent during the period. In comparison, the BSE Sensex was down 0.5 per cent at 77,890 at 11:04 AM.

 

Lupin has been marketing the Huminsulin range of products, comprising Insulin Human, through its existing Distribution and Promotion Agreements with Eli Lilly, India. The Huminsulin drug is indicated for the treatment of type 1 and type 2 diabetes mellitus to improve blood sugar control in both adults and children.

 

 

Insulin treatment is the cornerstone of type 1 diabetes management, and often becomes necessary over time in type 2 diabetes as the disease progresses. Further, there is a significant Indian population affected with both Type 1 and Type 2 Diabetes Mellitus, where Insulin Human is prescribed for their management along with other concomitant therapies, Lupin said in a press note.

 

Lupin specialises in pharmaceutical products, including branded and generic formulations, complex generics, biotechnology products, and active pharmaceutical ingredients. The company enjoys a strong position in India and the US across multiple therapy areas, including respiratory, cardiovascular, anti-diabetic, anti-infective, gastrointestinal, central nervous system, and women's health.

 

Lupin has recently been actively enhancing its domestic diabetes portfolio. Following the announcement to acquire three anti-diabetes brands from Boehringer Ingelheim, the company has now announced the acquisition of Huminsulin from Eli Lilly. This move is expected to bolster Lupin's diabetology segment, which currently contributes around 20 per cent to its domestic portfolio, according to ICICI Securities.

 

Meanwhile, in calendar year 2024, Lupin has outperformed the market by surging 80 per cent, as compared to the 8 per cent rise in the BSE Sensex and 43 per cent rally in the BSE Healthcare index.

 

On December 13, 2024, Lupin announced the acquisition of anti-diabetes trademarks for GIBTULIO (Empagliflozin), GIBTULIO MET (Empagliflozin + Metformin) and AJADUO (Empagliflozin + Linagliptin), from Boehringer Ingelheim International to strengthen its diabetes portfolio in the country. These drugs improve glycemic control in adults with type 2 diabetes mellitus as an adjunct to diet and exercise.

 

The company’s India business margins have been above company levels historically and now the US business margin has increased above company level as well. As the in-licensing contribution falls, analysts at BOB Capital Market, believe its margins and profitability will increase for the India region.

 

Lupin’s India business margins are expected to improve with the in-licence sales proportion reducing to 12 per cent in Q2FY25, from 15 per cent in Q2FY24, and further to around 10 per cent by FY26, with the acquisition of three brands in the diabetes segment.  The company is expected to report quarterly sales of above $250 million from FY26 for the US region in constant currency (CC) terms. Lupin's management believes the company’s product pipeline for the US in FY26 will increase US sales to $1 billion in CC terms. Hence, the brokerage firm expects Lupin’s sales to grow at a compound annual growth rate (CAGR) of 9 per cent and earnings at 19 per cent for FY25-27E.

 

Lupin is expected to be in the first wave of the launch of GLP products across regions. Due to its healthy product pipeline, analyst maintain a 'Buy' rating on the stock, with a target price of Rs 2,438.