Sun Pharmaceutical Industries touched an all-time intraday high of Rs 587 a share on Thursday on hopes of higher sales of its key cancer drug, Doxil, after innovator Janssen Pharmaceuticals Inc, a unit of Johnson & Johnson (J&J), said on Wednesday that the drug will likely be in short supply in the coming weeks.
The expected shortage in supply is due to an interruption from the company’s own supplier, Ben Venue Laboratories Inc, J&J said. The company said it is unable to provide an estimate of when the cancer drug would be available again and advised healthcare providers to contact Sun Pharma.
Analysts tracking the sector pointed out that Sun Pharma already has 50% market share in this drug, and the development means it will be the only supplier in the US until J&J resumes supply.
Credit Suisse initiated coverage on the company’s unit Taro Pharmaceutical Industries with an “outperform” rating and a target of $85, saying improving growth visibility, was seen helping the shares.
Barclays reiterated its overweight rating on the stock saying “we see renewed opportunity to drive Doxorubicin growth”.
“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 $120 million vs CY13 revenues of $63 million year to date) as a result of the current situation,” the report added