Pharma stocks edge higher on weak rupee

Eight pharma stocks rose by 0.01% to 1.4% at 12:45 IST on BSE as rupee edged lower against the dollar.

Meanwhile, the BSE Sensex was up 12.16 points, or 0.09%, to 26,372.02.

Among pharma stocks, Cipla (up 0.64%), Lupin (up 0.25%), Dr Reddy's Laboratories (up 0.01%), Cadila Healthcare (up 0.71%), Aurobindo Pharma (up 0.2%), Wockhardt (up 1.4%) and Sun Pharmaceutical Industries (up 0.32%) gained.

Weakness in rupee could boost sales of pharma companies in rupee terms as pharma firms derive substantial revenue from exports.

In the foreign exchange market, the rupee edged lower against the dollar as India's trade deficit more than doubled to $14.25 billion in September 2014 from $6.12 billion in September 2013. The partially convertible rupee was hovering at 61.465, compared with its close of 61.42 during the previous trading session.

Meanwhile, Ranbaxy Laboratories rose 0.31% after the company said it has settled the litigation concerning its participation in the Texas Medicaid Program. Under the settlement agreement, Ranbaxy will make payments to the State of Texas totaling $39.75 million in a series of tranches through August 2015.

The claims at issue related exclusively to the manner in which the Ranbaxy has historically reported pricing data to Texas Medicaid for certain of its drugs. As has been widely reported, the State of Texas has brought nearly identical claims against virtually every other major pharmaceutical manufacturer in the United States. Ranbaxy believes that it fully complied with all relevant laws, however the company settled the matter to avoid any further distraction and uncertainty of continued litigation with the State of Texas, the company said in a statement.

In a separate announcement during trading hours today, 16 October 2014, Ranbaxy said it has notified the Bank of New York Mellon to terminate the Deposit Agreements dated 7 July 1994 (under which the Rule 144A Global Depositary Shares / Regulation S Global Depositary Shares have been issued) and underlying GDR programme.

The Bank of New York Mellon on 15 October 2014 issued the notice of termination of GDR programme to the GDR holders and accordingly the bank will complete the process of termination of GDR programme as per the terms of such notice of termination, the company said.

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