Anthrax scare buoys select domestic pharma stocks

Our Markets Bureau

New Delhi, Oct 17: The Anthrax scare in the US has buoyed the stocks of select Indian pharmaceutical companies manufacturing and marketing Ciprofloxacin, a drug used to counter the deadly disease.
These stocks have spurted up to 12 per cent in the past four trading days as increasing number of cases have come to light in the past few days. Top gainers include Cipla, Dr Reddy’s, Ranbaxy Labs and Vorin Labs.

Though the Indian pharma companies cannot sell Ciprofloxacin in the US markets, they are keeping themselves ready to supply it elsewhere and to the US if and when required. There are reports that the drug has gone out of stock in the US markets due to panic purchases.

According to a Delhi-based broker: "Indian companies enjoy a huge cost advantage over their US counterparts. In case of an emergency, they can sell the drug at a much lower price, though the possibility of supplying to the US is only a remote possibility." Glaxo, Cipla and Ranbaxy have already entered into a pact to co-market the drug in the US markets under their own brands names, ie, Cifran OD of Ranbaxy, Ciplox OD from Cipla and C-OD from Glaxo. These stocks witnessed heightened activity on Wednesday after this announcement. Cipla turned out to be the top gainer among them as the stock gained over 5 per cent during the day to close at Rs 1,140.65. Over 2.69 lakh stocks changed hands to clock a turnover of Rs 30.56 crore. The stock has gained 11.28 per cent since its close of Rs 1,025 on October 11.

Dr Reddy’s also gained 3.56 per cent during the day to close at Rs 970.40, with a turnover of Rs 52.57 crore. The stock has gained 4.1 per cent since October 11, the day when it was quoting at Rs 932.20. Ranbaxy also witnessed a high turnover of Rs 100.25 crore spurting 2.44 per cent on Wednesday.

However, the largest gainer since October 11 has been the lesser known Vorin Labs, a Ranbaxy group company engaged in production of Ciprofloxacin for the past nine years. The stock has shot up by 12.24 per cent in the past four days to close at Rs 27.50.