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USFDA’s initial response to the Lipitor case – A positive for Ranbaxy
In a recent update on Ranbaxy’s Lipitor case, the FDA responded to Mylan’s suit asking the
court to deny Mylan’s request for a preliminary injunction and stating that no immediate
decision will be made on Ranbaxy's ANDA for Lipitor. It said that no drug manufacturer
can state USFDA’s priorities and that the administration has not made any unreasonable
delay in taking the decision. It further emphasised that there is no generic company that
has received any approval so far, and there is no certainty of approval until the technical
or scientific issues are resolved.
The FDA and Ranbaxy are engaged in discussions to resolve the issues and the clarity on
the positioning of the ANDA is unlikely to come soon. We retain our numbers for Ranbaxy
as the news is positive for the company and clarity on the ongoing litigation is still awaited.
The stock is currently trading at 16x and 10.4x its CY2011E and CY2012E earnings. Even
in the worst case, the stock would have an upside of 12% (excluding the Lipitor opportunity)
and, hence, the risk- reward is favourable. Thus, we maintain our stand on the company
and recommend Buy on the stock with a target price of `588.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
USFDA’s initial response to the Lipitor case – A positive for Ranbaxy
In a recent update on Ranbaxy’s Lipitor case, the FDA responded to Mylan’s suit asking the
court to deny Mylan’s request for a preliminary injunction and stating that no immediate
decision will be made on Ranbaxy's ANDA for Lipitor. It said that no drug manufacturer
can state USFDA’s priorities and that the administration has not made any unreasonable
delay in taking the decision. It further emphasised that there is no generic company that
has received any approval so far, and there is no certainty of approval until the technical
or scientific issues are resolved.
The FDA and Ranbaxy are engaged in discussions to resolve the issues and the clarity on
the positioning of the ANDA is unlikely to come soon. We retain our numbers for Ranbaxy
as the news is positive for the company and clarity on the ongoing litigation is still awaited.
The stock is currently trading at 16x and 10.4x its CY2011E and CY2012E earnings. Even
in the worst case, the stock would have an upside of 12% (excluding the Lipitor opportunity)
and, hence, the risk- reward is favourable. Thus, we maintain our stand on the company
and recommend Buy on the stock with a target price of `588.
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