Sun Pharma hits record; Ranbaxy touches 20-month high

In past one week, Sun Pharma and Ranbaxy has rallied over 12% each on the National Stock Exchange.

Shares of Sun Pharmaceutical Industries and Ranbaxy Laboratories are trading higher by 4% each on National Stock Exchange (NSE).

Sun Pharma has surged 4% to Rs 720, also its record high on NSE. Ranbaxy Laboratories too gained 3.8% to Rs 543, its highest level since November 2012.

In past one week, both these stocks have outperformed the market by gaining more than 12% each after USFDA granted approval to Ranbaxy's subsidiary Ohm Laboratories to manufacture and sell generic Diovan in the US. The benchmark CNX Nifty has gained 3% and CNX Pharma sector index by 8% during the same period.

Divoan, a multi-billion dollar drug, is used in the treatment of high blood pressure and heart failure.

Diovan sales in the US are $2.2 billion and the company indicated that the generic drug would be introduced with 180-days marketing exclusivity as soon as sufficient supplies are manufactured from its Ohm facilities located in New Jersey facility. 

The expected sales for Ranbaxy would be $150-225 million during the exclusivity period.

Analyst at J.P. Morgan in a recent research report said the approval for Diovan positively for Sun Pharma and Ranbaxy even as the deal is yet to be completed and approval for generic Nexium (another first to file for Ranbaxy) will be another catalyst going forward.