MUMBAI: Shares of Sun Pharmaceuticals gained momentum in a rangebound trade and touched 52-week high on hopes that the company will benefit after rival Janssen, a unit of Johnson & Johnson, announced shortage of cancer drug, Doxil in the US again.
At 11:25 a.m.; the stock was at Rs 584.95, up 2.88 per cent, on the BSE. It touched a high of Rs 586.80 and a low of Rs 569.75 in trade today.
Sun Pharmaceuticals and J&J have 50 per cent share each in Doxil, Doxorubicin HCL Liposome Injection used in treatment of cancer.
This is due to an interruption of supply from the company's own suppliers, Ben Venue Labs. Based on current usage trends, J&J expects a shortage from October 2013.
"We reiterate our OW rating on Sun Pharma as we see renewed opportunity to drive Doxorubicin growth," said Barclay report.
J&J cannot provide an estimate of when DOXIL could be available again and has advised healthcare providers to contact Sun Pharma for availability of Doxorubicin products.
"We believe Sun Pharma will directly benefit from the reduced competition on Doxorubicin. Sun's TRx growth in Doxorubicin had been declining recently and this news is likely to be a shot in the arm for Sun's generic Doxorubicin," the report added.
"Given the current Doxorubicin landscape, we reiterate our OW on Sun Pharma with a 12-month price target of Rs 600. We believe that Sun could likely repeat last year's success (CY2012 revenues of US$120m vs CY13 revenues of US$63m ytd) as a result of the current situation," the report added.