Jefferies upgrades Zydus Life to ‘Buy’ on strong US pipeline potential, stock up 4%, ET HealthWorld

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Jefferies upgrades Zydus Life to ‘Buy’ on strong US pipeline potential, stock up 4%, ET HealthWorld

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New Delhi: Global brokerage firm Jefferies has upgraded Zydus Lifesciences to a ‘Buy’ rating, citing the strength of the company’s US pipeline as a key driver for future growth.

The brokerage raised its target price for the stock to Rs 1,450 from the previous Rs 1,210, reflecting a 30% upside potential from the previous day’s closing price of Rs 1113.8 apiece on BSE.

According to Jefferies, Zydus Life’s US pipeline is one of the strongest in its coverage, with expectations of at least one major product launch annually, valued between $80-100 million.

This robust pipeline positions the company for high-reward opportunities, despite the inherent risks associated with such non-consensus strategies.

In the past three months, Zydus Life’s stock has surged nearly 8 per cent, underperforming compared to the Sensex’s gain of almost 9 per cent and the BSE Healthcare index’s rise of over 19 per cent.

The recent correction in Zydus Life’s stock has also presented a favorable buying opportunity, further justifying Jefferies’ bullish stance. The brokerage noted that the company’s outperformance relative to the Indian Pharmaceutical Market (IPM) is expected to continue going forward.

Additionally, Zydus Life’s US specialty business and vaccine offerings provide added value, which Jefferies believes enhances the company’s overall investment appeal.

Following the upgrade, Zydus Lifesciences’ stock surged 4 per cent to Rs 1,156 in Wednesday’s intraday trade on BSE.

Meanwhile, Zydus Life’s share price also zoomed after the company received regulatory ***** approval from the USFDA. The company bagged authorisation to market Amantadine extended-release capsules, 68.5 mg, and tentative approval for 137 mg. The ***** is a generic copy of the US reference-listed ***** Gocovri.

Amantadine extended-release capsules are indicated for the treatment of dyskinesia in patients with Parkinson’s ******** receiving levodopa-based therapy, with or without concomitant dopaminergic medications.

The ***** will be manufactured at the group’s formulation manufacturing facility in Ahmedabad SEZ – II, India, the company said in an exchange filing on Tuesday.

The approval makes Zydus eligible for 180 days of exclusivity for Amantadine the extended-release capsules, 68.5 mg. The Zydus group now has 400 approvals and has so far filed around 465 abbreviated new ***** applications (ANDAs) since the commencement of the filing process in FY 2003-04, the company said.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)

• Published On Aug 28, 2024 at 02:11 PM IST

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