Lupin and Medicis enter into a joint development agreement ::Angel Broking,

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Lupin and Medicis enter into a joint development agreement
Lupin has entered into a research and development agreement with Medicis
Pharmaceutical Corporation to apply proprietary Lupin formulation technologies to
multiple therapeutic compounds. Under the terms of the agreement, Lupin will receive a
US$20mn upfront payment from Medicis and will be primarily responsible for formulating
certain novel therapeutic products for Medicis, utilising several of Lupin’s formulation
technologies. Medicis will have global exclusive rights (excluding India) for the products
developed under the agreement. Lupin will be eligible for future research, development,
regulatory and other milestones of up to US$38mn, as well as a single-digit royalty on
sales by Medicis. Medicis will be responsible for further development and
commercialisation of the licensed products.
At the CMP, the stock trades at 19.7x FY2012E and 15.7x FY2013E earnings, respectively.
We maintain our Buy view on the stock with a target price of `593.