Gland Pharma hits new high; stock zooms 92% over issue price

Shares of Gland Pharma hit a new high of Rs 2,879 on the BSE, up 4 per cent, in intra-day trade on Tuesday, taking its winning run to the fourth straight day. During this period, the shares have rallied 16 per cent. The stock is quoting at the highest level since its listing on the bourses on November 20, 2020.

With the past four days' surge, Gland Pharma is now trading 92 per cent higher over its initial public offer (IPO) issue price of Rs 1,500 per share.

Last week, the Drug Controller General of India (DCGI) had approved the restricted emergency use of the Sputnik V, the vaccine against Covid-19 developed by Russia.

On March 16, Gland Pharma announced that it had entered into an agreement with the Russian Direct Investment Fund (RDIF) to supply up to 252 million doses of Sputnik V vaccine.

The vaccine has a proven efficacy rate of 91.5 per cent, which is the highest after the candidates of Moderna Inc and Pfizer-BioNTech. The cost of Sputnik V could be in the range of $3.5 per dose. The vaccine is required to be taken in two doses. It can be stored in dry form at temperatures ranging from 2 to 8 degrees.

Analysts at Axis Securities expect that at $3.5 price per dose at 25-30 per cent capacity utilisations for the domestic market, Gland Pharma could add Rs 1,500 crore to sales (Ebitda margins 15 per cent) and witness incremental EPS of Rs 6.4. This could add Rs 200 value per share to Gland Pharma, the brokerage said in an event update.

Meanwhile, Gland Pharma in a regulatory filing said this is the first of multiple partnerships being explored by the company to leverage its manufacturing capacity and capabilities to support the global supply of the Covid-19 vaccine.

The agreement will see the company utilising its Drug Substance and Drug Product facilities at its sites in Hyderabad. The production is expected to commence from the third quarter of 2021 for estimated delivery starting from the fourth quarter of 2021, it added.

"Under the terms of the agreement, Gland Pharma will first undertake technology transfer of the drug substance to its manufacturing facilities. After successful technology transfer, Gland Pharma will then undertake manufacturing of drug substance and drug product filling into vials under aseptic conditions," the filing said. Gland Pharma’s expertise in manufacturing sterile injectable at a significant scale will support in establishing a stable supply of Covid-19 vaccine, it added.

At 10:29 am, Gland Pharma was trading 1.5 per cent higher at Rs 2,806 on the BSE, as compared to a 0.66 per cent rise in the S&P BSE Sensex. A combined 280,000 equity shares have changed hands on the counter on the NSE and BSE so far.