Unichem Laboratories gets green flag from USFDA; stock rallies over 5%

During Thursday’s deals, the shares of Unichem Laboratories Limited zoomed by 5.63%. Additionally, the stock hit a fresh 52-week high mark of Rs 479.25. Furthermore, the scrip witnessed a spurt in volume by more than 2.97 times. The company’s current market capitalisation is Rs 3,313.29 crore.        

Recent development 

The company announced the approval of its Abbreviated New Drug Application (ANDA) for Doxazosin Tablets USP in strengths of 1 mg, 2 mg, 4 mg, and 8 mg by the United States Food and Drug Administration (USFDA).  

This approval allows Unichem to market a generic version of Cardura (Doxazosin) Tablets, matching the specifications of Viatris Specialty, LLC. Doxazosin tablets are used for the treatment of hypertension to lower blood pressure. The commercialization of this product will take place at Unichem’s manufacturing facility in Goa. 

Impact on the Company

1. Significant Revenue Potential: Doxazosin is a well-established drug for hypertension, with a US market size exceeding $1 billion. Unichem’s USFDA approval grants them entry into this lucrative market, opening up a new revenue stream and bolstering the company’s growth prospects. 
2. Competitive Advantage: The generic market offers lower prices compared to branded medications, giving Unichem a competitive edge. Their Goa plant’s efficient production could further enhance their cost competitiveness. 

Impact on Investors 

1. Increased valuation: The success of this generic launch could lead to a higher valuation for Unichem, making it a more attractive investment. 
2. Long-term growth potential: This USFDA approval signifies a step towards Unichem’s long-term growth strategy. Successfully establishing themselves in the US market can open doors for further product launches and market expansion, which can benefit investors in the long run. 

About the company 

Unichem Laboratories Ltd is engaged in the pharmaceutical industry, focusing on Generics, Active Pharmaceutical Ingredients (APIs), and Contract Manufacturing (CMO). 

Furthermore, the stock has witnessed significant buying activity as it has given returns of more than 55% in the last 1 year.     

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.