Sun Pharma, Mankind Pharma, Wockhardt, other pharma stocks surge up to 6%, Nifty Pharma up 1.5%; key things to know

Pharma stocks like Sun Pharmaceuticals, Wockhardt, Mankind Pharma, Torrent Pharma, and Biocon, among other heavyweight stocks, powered the sectoral index gains on Monday, September 21, as investors focused on defensive sector bets amid global monetary policy tightening, lower energy prices and positive momentum in the broader healthcare industry.

NSE data showed that the sectoral benchmark Nifty Pharma index surged 1.51% to touch an intraday high of 27,115.90 points on Monday’s market, in comparison to 26,710.10 points at the previous equity market close.

With high-growth sectors like IT and banks under selling pressure, equity market investors started off this week by powering the buying momentum and capital rotation into defensive stocks like Pharma, Healthcare, and FMCG, looking for stability amid the tightening monetary policy situation in the global market.

Stocks like Wockhardt, Mankind Pharma, and Sun Pharma were leading the pack of gainers on Monday’s market.

Last week, the US Federal Reserve and Bank of Japan, and the European Central Bank earlier this month; raised their key interest rates amid rising concerns of global inflation due to high energy prices.

After touching the intraday high, the Nifty Pharma index retracted its gains marginally to trade around 1.2% higher at 27,046 points as of 11:27 am (IST) on September 21.

Indian pharma companies are largely export-dependent, with the US as their primary market for export of medicines and medical equipment. With the lower price of global crude oil, the direct impact will be reflected in the reduction in freight costs of pharma companies.

Apart from these factors, certain stocks like Biocon were reacting to corporate updates along with the overall positive sentiment for healthcare companies.

Market experts predict that rising demand, increased affordability, and innovation opportunities, among other factors, are expected to support the longer-term outlook for the broader healthcare industry in India.

Pharma stocks in focus

Biocon secures EMA approval

NSE filing showed that Biocon’s wholly owned subsidiary, Biocon Biologics Ltd, secured a positive opinion recommendation from the European Medicines Agency (EMA), granting the company marketing authorisation for its Pertuzumab biosimilar as a 420 mg concentrate solution for infusion, under the brand name Pebrilzo.

The company also disclosed that Pebrilzo is a biosimilar medicinal product, which, in combination with Trastuzumab and chemotherapy, will be used for the treatment of adult patients with HER2-positive, locally advanced, inflammatory, or early-stage breast cancer at high risk of recurrence, as well as in adjuvant treatment of adults.

Pebrilzo will be used for the treatment of HER2-positive breast cancer across multiple disease stages.

“The positive CHMP opinion for our Pertuzumab biosimilar marks an important step toward expanding access to biologic therapies for patients with HER2-positive breast cancer in Europe,” said Shreehas Tambe, CEO & Managing Director of Biocon.

Up next, the European Commission will proceed with the final review of the application and issue its final decision.

Although the European Medicines Agency has granted the authorisation, the European Commission’s approval is mandatory for authorised use of the drugs in the European Union.

Positive outlook

Market experts predict that the long term outlook for the healthcare sector is expected to be supported by rising demand, increased affordability, innovation opportunities in niche therapies and complex specialities, among other things.

Although the sector has structural tailwinds ahead, the outperformance of the companies in the stock market will depend on company-specific earnings growth relative to valuations.

Earlier, Bernstein analysts said India’s Healthcare sector has a constructive outlook for the coming years, with a key focus on increasing penetration of health infrastructure in emerging economies.