Glenmark Pharmaceuticals (Glenmark) announced the receipt of regulatory approval to manufacture and market oral antiviral Favipiravir in India. It has been launched by Glenmark under the brand name ‘FabiFlu’ and is indicated for the treatment of mild to moderate COVID-19. This approval has been granted by DCGI under the accelerated approval process owing to the current precarious situation in India. Glenmark earlier received approval from DCGI for conducting clinical trials in India for Favipiravir in COVID-19 patients in early May and has now received marketing approval based on successful trials. Favipiravir showed clinical improvement of 88% in patients between age group of 20-90 years. This success reinforces company’s R&D capabilities and would provide decent financial upside. Maintain ‘BUY’.
Glenmark initially received DCGI nod to conduct phase-3 clinical trials with oral antiviral Favipiravir among COVID-19 patients in early May’20 and has now received manufacturing & marketing approval in India for treatment of mild to moderate COVID-19 patients. Glenmark has launched it under its brand name ‘FabiFlu’ and is working with the government and medical community to make it accessible quickly. This is a crucial success given deadly outbreak of COVID-19 in India. The sample included 150 subjects (90 mild and 60 moderate patients) in the age group of 20-90 years and improvements of up to 88% was seen. Glenmark has developed both the API and formulation in-house.
We maintain our estimates and raise target P/E(x) to 15x from 12x to factor in potential upside from Favipiravir and strong R&D capability. We maintain BUY rating with a revised target price of Rs488/share based on 15xFY22E EPS (earlier: Rs390/share). Downside risks: Regulatory hurdles and competitive pressures in the US.
