Dr Reddy's Lab extends gains after USFDA approval for anti-nausea drug

Dr Reddy's Laboratories rose 2.23% to Rs 3,259.50 at 14:25 IST on BSE, with the stock extending previous session's gains triggered by the company receiving approval from the US health regulator for anti-nausea drug.

Meanwhile, the BSE Sensex was up 27.39 points, or 0.11%, to 24,635.26.

On BSE, so far 39,231 shares were traded in the counter, compared with an average volume of 49,262 shares in the past one quarter. The stock hit a high of Rs 3,280 and a low of Rs 3,202.30 so far during the day. The stock hit a record high of Rs 4,382.95 on 20 October 2015. The stock hit a 52-week low of Rs 2,750 on 21 January 2016. The stock had outperformed the market over the past one month till 3 March 2016, rising 6% compared with the Sensex's 1.58% rise. The stock had also outperformed the market in past one quarter, falling 1.09% as against 4.94% fall in the Sensex.

The large-cap company has an equity capital of Rs 85.30 crore. Face value per share is Rs 5.

The stock had jumped 5.77% to Rs 3,188.35 yesterday, 3 March 2016 after Dr Reddy's Laboratories received approval from the US Food and Drug Administration (USFDA) for Palonosetron Hydrochloride injection or Aloxi generic on 3 March 2016. Palonosetron Hydrochloride is used to treat chemotherapy induced nausea.

Media reports suggested that this is a positive news for the company in the background of USFDA warning letters for its three plants. In November 2015, it had received a warning letter from USFDA for active pharmaceutical ingredients (APIs) manufacturing facilities at Srikakulam (Andhra Pradesh), Miryalaguda (Telengana), and oncology formulation manufacturing facility at Duvvada, Visakhapatnam, Andhra Pradesh.

In October 2015, Dr Reddy's Laboratories had entered into a settlement agreement with Helsinn Healthcare SA, a Switzerland-based pharma company for patent litigations related to Aloxi generic in the US. With this settlement, the company is permitted to market Aloxi generic on 30 September 2018 or earlier.

Dr Reddy's Laboratories' consolidated net profit rose 0.8% to Rs 579.20 crore on 3.2% rise in net sales to Rs 3967.90 crore in Q3 December 2015 over Q3 December 2014.

Dr Reddy's Laboratories is an integrated global pharmaceutical company. Through its three businesses - Pharmaceutical Services & Active Ingredients, Global Generics and Proprietary Products - Dr Reddy's offers a portfolio of products and services including APIs, custom pharmaceutical services, generics, biosimilars and differentiated formulations.

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