Laurus Labs surges 50% in one month on growth prospects in US market

The stock hit a 52-week high of Rs 494, up 9 per cent on the BSE on Wednesday, surging 20 per cent in past two trading days on expectation of strong growth prospects in United States.

Shares of Laurus Labs hit a 52-week high of Rs 494, up 9 per cent on the BSE on Wednesday, surging 20 per cent in the past two trading days on expectation of strong growth prospects in the United States (US). In the past one month, the stock of Laurus Labs has rallied 50 per cent, as compared to a 3 per cent rise in the S&P BSE Sensex.

Laurus Labs on March 27 said it will supply anti-malarial drug Hydroxychloroquine to its US partner Rising Pharma Holdings to test as a preventive treatment for novel coronavirus, or COVID-19.

Laurus Labs and its partner Rising Pharmaceuticals manufacture Hydroxychloroquine Sulphate, USP Tablets under an FDA approved drug application. Rising Pharmaceuticals is the exclusive distributor of the product in the US.

Hydroxychloroquine (HCQ) is a medication used for the prevention and treatment of certain types of malaria, as well as rheumatoid arthritis, lupus, and porphyria cutanea tarda.

HCQ prices have jumped anywhere between around 3.5 times in the US as the market continues to be plagued by shortage (declared since March 31) after drug was touted to be a cure for COVID-19.

“Laurus Labs is fully integrated in APIs and only imports the key starting materials (KSM) from China; it sees the opportunity lasting for about another 6 months with a meaningful contribution to sales,” analysts at YES Securities said in pharma sector update.

Laurus believes HCQs could evolve in to another Valsartan-like opportunity even as we note that sartans has emerged as a much more durable opportunity than earlier envisaged. Once Indian players start supplies, prices will decline through opportunity could still remain above the pre-shortage levels, it added.

At 09:55 am, Laurus Labs was trading 6 per cent higher at Rs 481 on the BSE, against 0.23 per cent rise in the S&P BSE Sensex. A combined 600,000 shares changed hands on the counter on the NSE and BSE so far.