Lupin gets USFDA nod for new constipation drug, stock gains

Shares of Lupin Ltd gained up to 1.5% to Rs 1959.70 after the pharmaceutical company announced a significant achievement with the approval from the United States Food and Drug Administration (USFDA) for its Prucalopride Tablets, used in the treatment of Chronic Idiopathic Constipation in adults. This product, bioequivalent to Motegrity Tablets of Takeda Pharmaceuticals, will be manufactured at Lupin's Goa facility in India.

The approval is expected to enhance the company's product portfolio in the US market, where IQVIA data estimated annual sales of $184 million for this drug. This development follows Lupin receiving tentative USFDA approval for Oxcarbazepine Extended-Release Tablets, to be produced at its Nagpur facility, marking a robust expansion of its therapeutic offerings in the US.

In Q4, Lupin reported a strong performance, with revenue rising 12.2% year-on-year to Rs 5,567.1 crore. Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) climbed 22.5% to Rs 996.85 crore. A notable contributor to this growth is the company's key US market, where sales rose to $245 million compared to $209 million in the same quarter last year. Despite these positive financial indicators,

Lupin operates in a highly competitive pharmaceutical industry, with major players like Sun Pharmaceutical and Dr. Reddy's Laboratories also vying for market share. The recent USFDA approval is expected to have a favourable impact on Lupin's US business, providing a potential revenue boost in the upcoming fiscal year. However, despite these positive developments, the stock's recent performance indicates that investor confidence may still be cautious.

Analysts will be watching closely how these developments affect Lupin's future market position and financial outlook, especially as it prepares for a potential revenue surge from its new drug launches. Moreover, the company's strategic focus on expanding its footprint in the US market underscores its commitment to growth and innovation, which are crucial in maintaining its competitive edge.