Lupin Shares Hit 52-Week High On Much-Awaited Drug Nod By U.S. FDA

Shares of Lupin Ltd. hit a 52-week high after the U.S. drug regulator approved the company's generic version of a drug used to treat patients with breathing problem.

Spiriva, or tiotropium bromide inhalation powder is used to prevent wheezing, shortness of breath, coughing, and chest tightness in chronic obstructive pulmonary disease patients.

The company received approval for its Abbreviated New Drug Application for Tiotropium Bromide inhalation powder, 18 mcg/capsule. This is a generic equivalent of Spiriva HandiHaler 18 mcg/capsule of Boehringer Ingelheim Pharmaceuticals Inc. The product will be manufactured at Lupin’s Pithampur facility in India, it said in an exchange filing.

"This is the first generic approval for Spiriva HandiHaler in the U.S., and is also the first dry powder inhalation approval from India for the U.S. This is an important milestone in our journey of building our respiratory franchise globally,” said Vinita Gupta, chief executive officer, Lupin.

The drug had estimated annual sales of $1,264 million, or around Rs 10,400 crore, in the U.S., as per IQVIA MAT March 2023.

gSpiriva remained the most important trigger for Lupin, IIFL Securities Ltd. had said in a note post its Q4 results. They were factoring around $100 million and $125 million revenue from Spiriva in FY24 and FY25 respectively, in their estimates.

The drug's approval was much awaited for Lupin and remains its largest opportunity in U.S., according to Monish Shah, pharma analyst at Antique Stock Broking Ltd.

"We expect gSpiriva to generate around $35 million, or around Rs 280 crore, in FY24 and over $110 million, or around Rs 900 crore, in FY25," Shah said.

Lupin, he said, will remain the sole generic on the market, at least for the next three years. "We expect it to contribute to about 25% to Lupin’s FY25 earnings."

Besides gSpiriva, they are optimistic on Lupin’s U.S. generic opportunities such as gPrezista, gMyrbetriq, gNascobal, and gXyrem, Shah said.

"As per our estimates these launches and gSpiriva are likely to drive the company’s U.S. generic revenue over $850 million, or around Rs 7,000 crore, by FY25."

Shares of Lupin rose 5.37% to Rs 874.5 apiece, compared to a 0.25% gain in the NSE Nifty 50 as of 2:11 p.m. The stock rose 6.68% intraday, the most in nearly two months since April 18.

The average traded volume so far in the day stood at 6.0 times its monthly average.

Of the 42 analysts tracking the company, 13 maintain a 'buy' rating, 13 suggest a 'hold' rating, and 16 suggest a 'sell', according to Bloomberg data. The average 12-month consensus price target implies a potential downside of 14.6%