DRL stock gets US court boost
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Jan. 31: Dr. Reddy’s Laboratories announced that it may soon be able to launch the generic version of Allegra 24, a popular drug in the US. On Friday, the district court of New Jersey filed a stipulation lifting an earlier motion and clearing the way for India’s second largest pharmaceutical company. Also, the court has asked, Sanofi-Aventis and Albany Moleculer Research, to post a security worth $40 million with the court.
The two plantiffs had secured the earlier injunction and the deposit is against the possibility that the earlier judgment may have been granted wrongly. DRL’s stock reacted favourably to the news, closing at Rs 1,624.45 on the BSE, up 3.72 per cent.
Allegra D 24 was a drug originally discovered and brought to the US market by French drugmaker Sanofi Aventis. The drug provides relief against allergies and nasal congestion via once a day dose.
DRL had obtained the necessary clearances to launch the generic version of the drug in March 2010, but had been stalled by the earlier injunction, which has now been lifted. Brokerage house Edelweiss estimates that the product could add up to $10 million to DRL’s topline during FY11 and $20-25 mn annually over the next two years.
However, the upside potential from the launch will be lower because Sanofi Aventis has also received the regulatory approvals to sell the drug without prescriptions from March. DRL should be able to launch an over the counter version of the drug in three to six months, the broker says.
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