The rally that pharmaceutical companies have witnessed on Dalal Street in the past few months has seen a lot of the stocks jump manifold, among these, Jubilant Life Sciences has recorded the second-best performance, up 83% from its recent low. The scrip traded at a 52-week-low value of Rs 234 per share on the last day of March and since then has been galloping northward, to now trade at Rs 482 apiece. What could further help Jubilant Life Sciences stock is the firm’s new deal with Gilead Sciences, which will see the pharma major register, manufacture and sell Gilead’s investigational drug, remdesivir, a potential therapy for coronavirus in 127 countries including India.
Jubilant Generics Limited, a subsidiary of Jubilant Life Sciences has entered into a non-exclusive license agreement with Gilead, the company said in a regulatory filing on Tuesday. Jubilant Life Sciences will now be able to register, manufacture and sell the drug, that is being touted as the potential therapy for coronavirus, in 127 countries. “Under the licensing agreement, Jubilant will have the right to receive a technology transfer of the Gilead manufacturing process to scale up production to enable expedited access of the medicine to Covid-19 patients upon approvals by regulatory authorities in respective countries,” it said.
The move, according to analysts, would help the stock. “It will work in favor of Jubilant Life Sciences, as technicals suggest a higher high higher low chart formation is in progress. It is strongly bullish. The next target will be 480-508,” Vishal Wagh, Research Head of Bonanza Portfolio told Financial Express online. Remdesivir, an investigation antiviral by Gilead has received an Emergency Use Authorization by the USFDA, which will help in a broader use of the drug on people suffering from coronavirus. “ The EUA is based on available data from two global clinical trials – US National Institute for Allergy and Infectious Diseases’ placebo-controlled Phase 3 study in patients with moderate to severe symptoms of COVID-19, and Gilead’s global Phase 3 study evaluating remdesivir in patients with severe disease,” Jubilant Life Sciences said.
Jubilant Life Sciences has a board approval to separate the Life Sciences Ingredients business. “The separate listing of Jubilant’s two business segments is expected to unlock value even as an NCLT approval and the demerger could now be delayed. With the pharma business expected to deliver steady growth and the LSI business expected to recover aided by an improved demand & pricing scenario for key products, the medium-term outlook remains positive,” said analysts at JM Financial with a buy rating on the stock and a target price of Rs 705 per share.