Alembic Pharma rebounds, up 4% on USFDA approval to Fluorouracil injection

Alembic Pharmaceuticals, an Indian pharmaceutical company, rebounded on Monday, gaining 4% after reaching a 52-week low last week. The US Food and Drug Administration approved the company's colorectal cancer injection, Fluorouracil Injection USP, 2.5 g/50 mL (50 mg/mL) Pharmacy Bulk Vial (USFDA). The injection is approved for the therapy of colon and rectum adenocarcinoma, breast adenocarcinoma, gastric adenocarcinoma, and pancreatic adenocarcinoma.

Fluorouracil Injection USP, 2.5 g Vial has an expected market size of US$5 million for the twelve months ending December 2022, according to IQVIA. Alembic Pharma has obtained 182 Abbreviated New Drug Application (ANDA) approvals from the USFDA, including 159 final approvals and 23 tentative approvals. Last week, the company stated that it will account for an impairment charge of Rs 1,150 crore for three of its under-construction manufacturing facilities, causing its share price to fall by 5% on Friday, March 3, 2023, to a new 52-week low of Rs 476 per share on the BSE.

The total write-off for the business is now Rs 1,490 crore, including Rs 340 crore for the buyout of its partner stake in Aleor Derma in March last year. The pharma company's net profit fell 29 percent year on year to Rs 122 crore in Q3FY23, owing to poor operating performance and low other revenue. However, its income from operations increased by 19% year on year to Rs 1,509 crore, with growth across verticals, with the US business increasing by 10% to Rs 432 crore and the India segment increasing by 12% to Rs 545 crore.

Alembic Pharma's stock price has dropped by 15% in the last three months. Furthermore, it has dropped more than 50% from its all-time high in December 2020, owing to stress and margin pressures in the US generics industry. As of 12:21 a.m., the stock was trading 4.07 percent higher on the BSE at Rs 521.95 apiece, while peers Sun Pharma and Granules were trading 0.73 percent and 1.94 percent higher at Rs 973.80 and Rs 291.25 apiece, respectively. The S&P BSE healthcare was trading 0.68 percent higher at 21,839.58 points.