Pharma Stocks Outlook for the week – 06 to 10.02.2017
Pharma Stocks Outlook for the week – 06 to 10.02.2017
( www.rupeedesk.in )
Stocks of pharmaceutical companies are likely to rise next week as fears of US President Donald Trump's disruptive policies continue to wane. Trump's policies seem to have two objectives--reducing drug prices and bringing manufacturing back to the US. The two objectives cannot go together. Most of his policies are targeted at big pharmaceutical companies, which manufacture innovative drugs, and are unlikely to hit growth for Indian generic drug makers in the near term. On Thursday, stocks of pharmaceutical companies were among the leading gainers on the exchanges after report said the US Senate tax chief raised questions over the proposed border adjustment tax and said that Republicans may find it difficult to pass the bill. The border tax is seen as detrimental for Indian pharmaceutical companies. While it's still early days on how the new US government intends to follow-up on this, the appointment of a new FDA Commissioner in the coming weeks should give an indication of the policy direction. On Tuesday, Trump had said he would streamline the US Food and Drug Administration to accelerate the pace of drug approvals. For generic companies, a faster pace of approval can only mean a higher competitive intensity. Analysts, though, remain cautious on pharmaceutical companies' regulatory issues and pricing pressure in the US market, the biggest revenue contributor for most companies. Many Indian pharmaceutical companies, like Sun Pharmaceutical Industries and Wockhardt, are weighed down by regulatory issues. Also, consolidation of distribution channel has put pressure on drug prices in the US over the last one year. While most stocks are expected to gain next week, it will be subject to whether they are able to clear the immediate resistances they are trading near. Dr Reddy's earnings on Saturday would be a major trigger for the stock. The Hyderabad-based pharmaceuticals major is likely to report a consolidated net profit of 3.7 bln rupees for Oct-Dec on consolidated net sales of 37.4 bln rupees. Next week, Lupin, Cipla, Aurobindo Pharma and Glenmark also report their corporate earnings for the December quarter.
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Pharma Stocks Outlook for the week – 06 to 10.02.2017
( www.rupeedesk.in )
Stocks of pharmaceutical companies are likely to rise next week as fears of US President Donald Trump's disruptive policies continue to wane. Trump's policies seem to have two objectives--reducing drug prices and bringing manufacturing back to the US. The two objectives cannot go together. Most of his policies are targeted at big pharmaceutical companies, which manufacture innovative drugs, and are unlikely to hit growth for Indian generic drug makers in the near term. On Thursday, stocks of pharmaceutical companies were among the leading gainers on the exchanges after report said the US Senate tax chief raised questions over the proposed border adjustment tax and said that Republicans may find it difficult to pass the bill. The border tax is seen as detrimental for Indian pharmaceutical companies. While it's still early days on how the new US government intends to follow-up on this, the appointment of a new FDA Commissioner in the coming weeks should give an indication of the policy direction. On Tuesday, Trump had said he would streamline the US Food and Drug Administration to accelerate the pace of drug approvals. For generic companies, a faster pace of approval can only mean a higher competitive intensity. Analysts, though, remain cautious on pharmaceutical companies' regulatory issues and pricing pressure in the US market, the biggest revenue contributor for most companies. Many Indian pharmaceutical companies, like Sun Pharmaceutical Industries and Wockhardt, are weighed down by regulatory issues. Also, consolidation of distribution channel has put pressure on drug prices in the US over the last one year. While most stocks are expected to gain next week, it will be subject to whether they are able to clear the immediate resistances they are trading near. Dr Reddy's earnings on Saturday would be a major trigger for the stock. The Hyderabad-based pharmaceuticals major is likely to report a consolidated net profit of 3.7 bln rupees for Oct-Dec on consolidated net sales of 37.4 bln rupees. Next week, Lupin, Cipla, Aurobindo Pharma and Glenmark also report their corporate earnings for the December quarter.
