Pharma Stocks Outlook for the week – 12 to 16.06.2017

Pharma Stocks Outlook for the week – 12 to 16.06.2017

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Pharma Stocks Outlook for the week – 12 to 16.06.2017 )

Stocks of most pharmaceutical companies are expected to continue their rally next week, after
hitting 52-week lows last week. However, the long-term outlook on these stocks is subdued due to
persisting regulatory and pricing concerns in the US. The long-term outlook for the sector remains
negative due to pressure on pricing, as well as regulatory issues in the US, the largest market for this
segment.In an interview to a business news website on Tuesday, new US Food and Drug dministration Commissioner Scott Gottlieb said he aimed to target high-priced drugs by ensuring that there is
enough competition to lower prices. In our view, this move, if implemented, could cause greater
generic competitive intensity... If the strategy is successful, high-value launch opportunities would
also dry up for the industry in the coming years. Apart from price erosion, many companies are still
ailing from regulatory overhangs on their units.Sun Pharmaceutical Industries gave a single-digit revenue growth guidance for 2017-18 (Apr-Mar)due to uncertainty over operations in the US and Indian markets. The company's managing director, Dilip Shanghvi, said the company would review the guidance if the US FDA cleared its Halol facility in Gujarat, which received a warning letter in December 2015. Lupin has also given a similar revenue outlook for the current financial year started April, citing severe stress on its US generics business.

Source : Cogencis Information Services Ltd.