Shares of Dr Reddy’s Laboratories today jumped as much as 10% to extend its weekly gains to 20% after the drugmaker settled a patent litigation with Celgene, a unit of U.S.-based Bristol-Myers Squibb Co. Analysts at BofA Securities upgraded Dr Reddy’s Laboratories to “buy” from “neutral” after the news, saying the “unexpected” settlement is “not entirely clear but definitely valuable”.
Investec Securities also upgraded the pharma company to “hold” from “sell”.
Dr Reddy’s Laboratories on Thursday said it has settled a litigation with a unit of Bristol Myers Squibb related to patents for Revlimid (lenalidomide) capsules, used to treat various kinds of cancer. Celgene’s cancer drug Revlimid had raked in $2.9 billion in June-quarter sales, Reuters reported.
Sentiment in Dr Reddy’s were lifted after it reached an agreement with Russia’s sovereign wealth fund RDIF for supply of 10 crore doses of Sputnik V COVID-19 vaccine to the drug maker upon getting regulatory approval in India.
The Russian Direct Investment Fund is collaborating with Dr Reddy’s Laboratories to conduct clinical trials of the Sputnik V vaccine against COVID-19 as well as its distribution.
India’s pharma sector index has surged 51% so far this year with Dr Reddy’s Laboratories climbing 82% year to date.
In settlement of all outstanding claims in the litigation, Celgene has agreed to provide the company with a license to sell volume-limited amounts of generic lenalidomide capsules in the US beginning on a confidential date after March 2022 subject to regulatory approval, it added.
The agreed-upon percentages are confidential, Dr Reddy’s said.
The drug maker is already licensed to sell generic lenalidomide capsules in the US without volume limitation beginning on January 31, 2026, Dr Reddy’s said.
“We are pleased with the settlement agreement, and look forward to bringing a generic version of lenalidomide to market soon subject to regulatory approval for the benefit of patients,” Dr Reddy’s Laboratories North America Generics CEO Marc Kikuchi said.
Revlimid, a trademark of Celgene, is used to treat multiple myeloma and myelodysplastic syndromes. (With Agency Inputs)
News Source:- livemint