(Bloomberg) -- Gedeon Richter Nyrt., eastern Europe's largest drugmaker, rallied the most since July after the U.S. approved the expanded use of its blockbuster anti-psychotic Vraylar.
Richter and Allergan Plc, which is responsible for marketing in the U.S., received permission to use the drug to treat bipolar depression, a broader condition that affects 11 million people in the country, the companies said in a regulatory statement.
Market Reaction:
- Shares reversed a decline of around 0.5% to trade as much as 6% higher after the announcement, the biggest rally since July; Stock pares this year's decline to 3.3%, still underperforming the 3.3% gain in the benchmark BUX index
Key Insights:
- Vraylar has been Richter's main driver of revenue growth after the use of its other blockbuster drug, Esmya, was limited by European authorities due to side effects
- Concorde Securities raises Richter price target to 6,300 forint from 5,800 on the news, offering almost 20% upside compared with spot price
- Vraylar's contribution to clean pharma EBIT may grow above 50% this year from almost 40% in 2018, Concorde analyst Attila Vago says by email
- Last year, Richter received 75.9 million euros in royalties related to the drug
- Click here to see the statement
- Read a story on Richter's latest earnings report
Get More:
To contact the reporter on this story: Marton Eder in Budapest at meder4@bloomberg.net
To contact the editors responsible for this story: Dana El Baltaji at delbaltaji@bloomberg.net, Monica Houston-Waesch
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