Drug market Cipla rose in a sluggish market Wednesday and was among the few shares trading higher on the Nifty index. Shares of the company traded 0.5% higher at Rs 312.50 on the National Stock Exchange while the broader Nifty index was down 36 points or 0.7% at 5,207 at 10.50 am.
The stock witnessed buying interest on the back of the US Food and Drug Administration (FDA) approving Akorn's generic Vancocin capsules used in the treatment of diarrhea. Cipla is the manufacturing partner of Akorn, which is a US based pharma firm.
Cipla will supply the product exclusively to Akorn for the US market.
The total market size for the drug in US is $330-335 million (Rs 1,650 crore) and analysts expect Cipla to corner 25% market share, which translates into a $30 million (Rs 150 crore) revenue opportunity for Cipla.
Morgan Stanley expects 2% earnings per share (EPS) upside for Cipla via this drug.
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