Strides Pharma shares zoom 8% on US FDA approval for Ursodiol tablets

Ursodiol is used for treatment of patients with primary biliary cirrhosis (PBC)

Shares of Strides Pharma Science rose 8.16 per cent to Rs 614.65.on the BSE on Friday after the company received the approval of US health regulator (US FDA) for Ursodiol Tablets used for treatment of patients with primary biliary cirrhosis (PBC). 

PBC is a progressive disease of the liver caused by a buildup of bile within the liver that results in damage to the small bile ducts that drain bile from the liver.

"Strides Pharma Global, Singapore, has received approval for Ursodiol tablets USP in the strengths of 250 mg and 500 mg from the United States Food and Drug Administration (USFDA)," the company said in a regulatory filing.

The product is a generic version of Urso 250 tablets, 250 mg, and Urso Forte Tablets, 500 mg, of Allergan Sales, LLC.

Quoting IQVIA moving annual total (MAT) June 2020 data, Strides Pharma Science said the US market for Ursodiol tablets USP, 250 mg and 500 mg, is approximately $35 million.

"The product will be manufactured at the company''s flagship facility at Bengaluru and will be marketed by Strides Pharma in the US market," Strides Pharma said.

The company has 126 cumulative ANDA filings with USFDA of which 88 ANDAs have been approved and 38 are pending approval.

At 11:07 AM, the stock was trading 6.48 per cent higher at Rs 605.5 as compared to 0.7 per cent gain in the S&P BSE Sensex. Around 20.9 lakh shares have changed hands on the NSE and BSE, combined, so far. The stock was trading close to its 52-week high of Rs 628.45, hit on August 11, 2020.

On August 19, the company had announced the successful completion of the inspection carried out by the UK Medicines and Healthcare products Regulatory Agency (UK MHRA) at its Puducherry facility between October 15-18, 2019. "The Company has now received the renewed GMP (Good Manufacturing Practices) certificate thereby confirming the successful closure of the inspection," it said. 

On the results front, the drug firm reported over four-fold rise in its consolidated net profit at Rs 101.84 crore for the quarter ended June 30, 2020, mainly on account of a one-time gain. Total income of the company stood at Rs 794.10 crore in the quarter under consideration as compared to Rs 696.05 crore in the same period a year ago.

The company had a gain of Rs 44.91 crore, shown as an exceptional item, in the quarter ended June this year.

In its result review, JM Financial had said that modex capex requirement, strong margin expansion and FCF generation is expected to aid further improvement in Strides’ balance sheet position.

"Given Strides’ strong portfolio of yet-to-be commercialized ANDAs & launch momentum in US , the expected ramp up in the utilization of the Singapore facility and the foray into soft gelatin capsules, the medium-term growth outlook for the US business remains robust. With the strong order book visibility in other regulated markets offering further comfort and the EBITDA contribution of EM & institutional businesses now expected to be significant, we expect operating leverage gains to play out fully over the next few quarters," the brokerage said

Geojit Financial Services, in a report dated August 7, said that it expects the turnaround in the US and emerging markets segments as well the momentum in the other regulated markets to continue on the back of new launches, favorable pricing environment as well as the company’s strong supply chain infrastructure.

"The benefits from the Stelis Biopharma acquisition are expected to come through in the next 1-2 years. The CDMO segment in the Stelis business could be a game changer for the company in the long run. On the back of these assumptions, we reiterate an “Accumulate” rating on the Strides based on 13x FY22E EPS with a target price of Rs.621," it said.