New drug launch sends Lupin shares soaring to record highs! Find out what’s next

Lupin Limited, a global pharmaceutical major, has seen its share price reach a 52-week high following the launch of its generic Mirabegron Extended-Release Tablets, 50 mg, in the United States. The approval from the United States Food and Drug Administration (USFDA) has enabled Lupin to introduce a generic equivalent of Myrbetriq Extended-Release Tablets, developed by Astellas Pharma Global Development, Inc., to treat overactive bladder (OAB) conditions.

Key Drivers Behind the Surge

The Lupin share price rose by over 1% during trading sessions, hitting a new 52-week high of ₹2,306.85 on the Bombay Stock Exchange (BSE). The stock opened at ₹2,289.90, experienced an intraday low of ₹2,268.10, and settled higher on the back of increased investor interest following the announcement. This significant milestone has come in light of the USFDA’s approval of Lupin’s Mirabegron Extended-Release Tablets, which are projected to generate annual sales of around $1.6 billion in the U.S., according to IQVIA MAT data from July 2024.

The launch is particularly noteworthy as Lupin, along with Zydus Pharmaceuticals, will enjoy six months of market exclusivity for the Mirabegron tablets in the U.S. market. Both companies have secured approval for 25 mg and 50 mg strengths; however, their launch remains “at risk” due to ongoing litigation, according to brokerage ICICI Direct Research. The exclusivity window could prevent other competitors from entering the market until a court resolution is reached, providing a potential boost to Lupin’s revenue in the short term.

Market and Product Overview

Mirabegron, the active ingredient in Lupin’s new tablets, is primarily used to treat the symptoms of overactive bladder, such as incontinence, urgency, and frequent urination. It is also effective for treating neurogenic detrusor overactivity (NDO), a condition often seen in individuals with neurological disorders. The drug’s approval and launch in the U.S. come at a time when Lupin has been expanding its product portfolio in the U.S., the world’s largest pharmaceutical market.

The company recently announced the availability of single-dose vials of doxorubicin hydrochloride liposome injection in the U.S., following another USFDA approval. This expansion underscores Lupin’s strategy to diversify its product offerings and strengthen its presence in critical therapeutic areas.

Financial Performance and Investor Sentiment

Lupin’s strong performance in the stock market is supported by its robust financial results. For the first quarter of the fiscal year 2024, Lupin reported a consolidated net profit of ₹801.31 crore, up 76.01% from ₹452.26 crore in Q1 FY23. Revenue from operations also increased by 16.28% year-on-year to ₹5,514.34 crore. This growth has bolstered investor confidence, leading to a 109.96% increase in the stock price over the past year, significantly outperforming its sector by 40.9%.

Market analysts suggest that Lupin’s stock has strong support around ₹2,140, which aligns with the 20-day exponential moving average (DEMA). The recent uptick in share price, coupled with rising volumes and limited downside risks, has resulted in positive sentiment among investors and analysts alike.

Outlook for Lupin

The outlook for Lupin appears optimistic as the company continues to expand its product line and capitalize on market exclusivity opportunities in the U.S. Moreover, Lupin’s strategic partnerships, such as the one with ForDoz Pharma Corporation for doxorubicin hydrochloride liposome injection, and its ongoing focus on innovation, are expected to contribute positively to its revenue and profitability.

While the “at risk” launch of Mirabegron could pose potential challenges due to litigation, the market exclusivity window presents a lucrative opportunity for Lupin to capture a significant share of the U.S. market for overactive bladder treatments.

Overall, Lupin’s latest move has strengthened its position in the competitive pharmaceutical landscape, with the company well-positioned to benefit from the growing demand for affordable generic medications in the U.S. market.