Select pharma shares gain on tie-up for Pfizer Covid-19 oral treatment drug

Shares of select pharmaceutical companies rallied up to 8 per cent on the BSE in Monday’s intra-day trade after several companies signed voluntary license for Pfizer Inc's Covid-19 oral treatment– nirmatrelvir.

Nirmatrelvir in combination with ritonavir co-pack has received emergency use/conditional authorization for Covid-19 treatment in certain populations by the US FDA and the UK Medicines and Healthcare products Regulatory Agency (UK MHRA and nearly 50 other countries).

Among individual stocks, Aurobindo Pharma was the top gainer, which rallied 8 per cent to Rs 688.90 on the BSE in intra-day trade. The stock has recovered 18 per cent from its 52-week low of Rs 584.20 touched on March 7, 2022. It had hit a 52-week high of Rs 1,063.75 on May 11, 2021.

Aurobindo has already developed and commercialized ritonavir which is used as a booster along with nirmatrelvir. For nirmatrelvir and ritonavir molecules, like other antivirals, Aurobindo enjoys backward integration with inhouse API manufacturing which equips it with stronger control on supply chain and cost efficiencies, the company said in a press release. CLICK HERE FOR FULL RELEASE

Sun Pharma hit a fresh 52-week high of Rs 930.90, up 2 per cent on the BSE in intra-day trade. Biocon, Cipla, Divis Laboratories, Granules India and Laurus Labs were up in the range of 1 per cent to 4 per cent. In comparison, the S&P BSE Sensex was down 0.31 per cent, at 12:11 pm.

UN backed Medicine Patent Pool (MPP) has signed an agreement with 35 companies worldwide to produce a generic version of the Covid-19 treatment Paxlovid for supply in 95 LMIC including India. Of the 35 companies, six will produce ingredients for the pill, nine will manufacture the finished product and the remaining 20 will do both.

Nineteen of the companies in the MPP deal are in India, with notables players being - Aurobindo, Biocon, Zydus Lifesciences, Cipla, Divi’s, Glenmark, Granules, Laurus, Sun Pharma and Torrent Pharma.

"Although, overall Paxlovid opportunity for CY22 is US$22 billion comprising of 120 million courses (Pfizer's guidance), Pfizer has earmarked only 10 million courses for this deal. With so many players competing for this opportunity, we do not expect meaningful traction. However, standalone API players (which are expected to cater to commercial supplies as well) can expect some windfall", ICICI Securities said in a note.

Pfizer will not receive royalties from sales of the generics as long as the WHO continues to classify the pandemic as a global health emergency.

Afterwards, sales to low-income countries will remain royalty-free, while sales to other countries will be subject to a 5 per cent or 10 per cent royalty depending on income classification.