Jhunjhunwala Portfolio: This pharma stock has zoomed over 100% in 6 months

Shares of Jubilant Pharmova surged 12 per cent on the BSE in Friday's intra-day trade to hit a new high of Rs 1,169.55, in an otherwise subdued market.

Shares of Jubilant Pharmova hit a new high of Rs 1,169.55, after they surged 12 per cent on the BSE in Friday’s intra-day trade in an otherwise subdued market. In comparison, the BSE Sensex was down 0.02 per cent at 82,950 at 01:18 PM.

In the past one month, the stock of the pharmaceutical company has rallied 38 per cent, as compared to the 5 per cent rise in the benchmark BSE Sensex. However, in the past six months, the market price of the Jubilant Bhartia Group company has more than doubled, or zoomed 114 per cent from the level of Rs 546.60.

Investor Rekha Jhunjhunwala held 10.47 million equity shares, or a 6.57 per cent stake, in Jubilant Pharmova at the end of June 2024 quarter, the company's shareholding pattern data shows.

Jubilant Pharmova (formerly Jubilant Life Sciences) is engaged in radiopharma, allergy immunotherapy, CDMO of sterile injectables, generics, contract research development and manufacturing (CRDMO) and proprietary novel drugs businesses.

Since September 2, in the past 10 trading sessions, the company's stock has soared 28 per cent on the BSE.

Jubilant Pharmova, on Tuesday, September 10, informed that its facility in Washington, US, operating under Jubilant HollisterStier, has been classified as ‘Voluntary Action Indicated’ by the US drug regulatory agency.

“United States Food and Drugs Administration (USFDA) had audited JHS's contract manufacturing facility located at Spokane, Washington (USA) from May 28, 2024 to June 6, 2024, it has determined the inspection classification of the facility as ‘Voluntary Action Indicated’,” the company said in an exchange filing.

A voluntary action indicated (VAI) status from the FDA means an inspection identified objectionable conditions or practices, but no immediate regulatory action is recommended. Meanwhile, official action indicated (OAI) means objectionable conditions were found, and regulatory action is recommended. 

Jubilant HollisterStier is a contract manufacturer of sterile injectables (both liquid and lyophilisation), ampoules and ophthalmics (ointment, liquid and creams).

Jubilant HollisterStier LLC is a subsidiary of Jubilant Pharma Holding Inc, which is a subsidiary of Jubilant Pharma, Singapore, a wholly owned subsidiary of Jubilant Pharmova.

Meanwhile, in the radiopharma business, Jubilant Pharmova said the company has a strong pipeline of products across SPECT, PET and therapeutics, which will drive revenue in the medium-term. 

In radiopharmaceuticals, the market is expected to grow multifold on the back of superior imaging and therapeutic profiles, new emerging isotopes and increasing use-cases for unmet needs. Particularly, PET diagnostics and advance therapeutics segment is witnessing the launch of new and differentiated products, the company said in its FY24 annual report.

Further, increased merger and acquisition (M&A) activity in this segment also shows the growing interest of large pharmaceutical companies to make an entry into the radiopharmaceuticals business.

In the CDMO sterile injectables segment, the management is seeing significant shortages in the US market, signaling the need for significant on-shoring, while in the generics business, the company has started to see inflation coming back in the US market, signalling a structural shift after years of consolidation in the Industry.

Meanwhile, in the drug discovery business, the proposed Biosecure Act in the US is expected to shift a lot of business to companies in 'friend sourcing' locations such as India, the company added.

Jubilant Draximage Inc., another subsidiary of the company’s wholly-owned subsidiary Jubilant Pharma, announced an investment of $50 million to expand its PET radiopharmacy network by adding six PET radiopharmacies in strategic locations throughout the US.

This investment shall position the company in the growing PET Imaging segment and shall also enable it to secure long-term contracts with leading PET radiopharmaceutical manufacturers. The new PET radiopharmacies shall be fully operational in FY28, the company said.