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Sunday, December 21, 2008

Lupin - Investment update report

Lupin announced that it has settled the patent challenge litigation relating to Desloratadine tablets. This announcement could help it regain the positive momentum. Investment updte report from Kotak securities brokerage house.

Reco price: Rs 554
Current market price: Rs 577.35
Target price: Rs 950
Upside: 64.5%
Brokerage: Kotak Securities


Lupin announced that it has settled the patent challenge litigation relating to Desloratadine tablets, the generic version of Schering-Plough’s “Clarinex” tablets used in treatment of allergy. Lupin will be licensed under the relevant patents, and free to commercially launch its generic Desloratadine product, on July 1, 2012, or earlier. Clarinex tablets had sales of $329 million in US for the year 2007-MAT June 2008, according to IMS Health.

Patents for this product were being challenged by several companies like Zydus, Sandoz, Mylan, etc. It is likely that Schering will announce settlement with more companies in future as it did with Perrigo in December 2008. More settlements would reduce the size of benefit for Lupin. Given that revenues would start in July 2012, the brokerage has not made any changes to its earlier estimates. Lupin was also under pressure in the past month due to US FDA inspection at its Mandideep plant. This announcement could help it regain the positive momentum.

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