Morgan Stanley Goes Overweight on Sun Pharma
DSIJ Intelligence / 27 Sep 2013
The news of drug shortage on the Innovator’s part in the US market has led Morgan Stanley to go overweight on Sun Pharma.
Owing to the shortages of the cancer product Doxil in the US market, Morgan Stanley has gone overweight on Sun Pharma. It has upgraded the target price of the stock to Rs 724 implying 23% upside from the current price of Rs 589.
Morgan Stanley in its report has increased its FY14-FY16 EPS estimates due to the higher sales of generic of Doxil. Sun Pharma is the only generic manufacturer of Doxil. The company is set to rip higher benefits after the innovator company has said that there would be the drug shortages in the coming weeks.
Doxil is an anti-cancer drug of Janssen Pharmaceuticals which is a subsidiary of Johnson and Johnson (J&J). Morgan Stanley analysts have in their note have said that “Doxil is a complex drug with high technical entry barriers. Sun is now the only generic player in the market, and visibility for additional players is not high. Therefore, J&J’s temporary exit should benefit Sun. We have raised our estimate of Sun’s market share by 25ppts, to 75%, over next few months.”
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