Pharma and healthcare companies are making a strong comeback on the bourses. At least one of these companies have been hitting their 52-week high every day since the last month on the BSE. All these stocks have also been net gainers for the year till date, while the BSE Sensex has dipped 1.7% during the same period.
The share price of Sun Pharma has gained 8.9% since last month hitting its latest 52-week high of Rs 1,705 on March 12. Cadila Healthcare, which has breached it 52-week high six times in the last one month, gained 14%. GlaxoSmithkline Consumer Healthcare has hit five new highs in the last month and surged 5.9% during the same period.
According to analysts, one of the chief reasons for the renewed interest in these stocks is that in 2010 and 2011 many of the patented drugs will go off patent in the US. ?This gives several opportunities for domestic generic companies as well as contract research and manufacturing companies (CRAMS) to tap the US market,? said DD Sharma, Senior VP ? Research (retail), Anand Rathi.
The global market for generics in calendar year 2008 is estimated to be at around $80 billion and will likely go up to $150 billion by 2015. India is among the largest exporters of generic drugs in the world and currently exports about $7 billion worth of drugs.
According to a recent report by Enam Securities, in Q3FY10, generic players reported higher-than-expected sales growth, due to smart gains in domestic formulation sales and exports, especially in the US.