After opening the day in green, Share markets in India witnessed selling pressure and are presently trading in red. Sectoral indices are trading on a mixed note, with stocks in the IT sector and stocks in the telecom sector witnessing maximum buying interest. While stocks in the pharma sector are leading the losses.
The BSE Sensex is trading down by 160 points (down 0.5%) and the NSE Nifty is trading down by 45 points (down 0.4%). Meanwhile, the BSE Mid Cap index is trading down by 0.8%, while the BSE Small Cap index is trading down by 0.5%. The rupee is trading at 64.84 to the US$.
In news from stocks in the pharma sector. Biocon share price is in focus today after its partner Mylan N.V. has resubmitted marketing authorization applications for two of its products to the European Medicines Agency (EMA).
Mylan resubmitted applications for two biosimilars-trastuzumab and pegfilgrastim-with the EMA that were withdrawn in August due to quality compliance issues at Biocon's manufacturing plant.
In March, Biocon's drug substance and drug product sites in Bengaluru were inspected by French National Agency for Medicines and Health Products Safety on behalf of the EMA. The inspection was related to Biocon's pending marketing authorization applications for biosimilars trastuzumab and pegfilgrastim as well as for insulin glargine.
While the French regulator issued good manufacturing practices (GMPs) certificates to the company's two drug substance manufacturing units, it found quality lapses in the drug product unit.
Biocon has completed the corrective and preventive actions, including the facility modifications, in response to the audit observations and expects these to be verified during re-inspection.
The company will get GMP compliance certificate for the drug product facility only after a follow-up inspection by EMA to verify the implementation of the corrective and preventive actions for the plant.
The Indian pharmaceutical industry has come under a lot of regulatory pressure in the past few years.
The list of pharma sector woes is long. So, is there light at the end of the tunnel? Girish Shetty, our research analyst thinks there is.
As per him, it doesn't make sense to paint all pharma stocks with the same brush. The leaders of the industry will certainly survive this phase. There are interesting, niche pharma stocks that are worth your attention.
Facing pricing pressures in the domestic and export markets, currency fluctuations, as well as manufacturing issues related to their plant, there is a transformation happening in the overall sector as to how business is done and will be done in the future.
USFDA sweetener for Indian Pharma
In recent times, pharma companies were bogged down by mounting pressure from US Food and Drug Administration (USFDA) to adhere to quality standards at their manufacturing plants. In the past three years, the USFDA raised numerous regulatory concerns resulting in import bans and suspension of new drug approvals from facilities of Indian pharma companies. But what has come as a breather is a sharp pick-up in new drug approvals in 2017. During the period January-July 2017, 129 approvals for generic drugs were made. This is 45% higher from 89 approvals made in the corresponding period last year.
As per the Indian Pharmaceutical Alliance, the pace of drug approvals has gained momentum after they complained to FDA about delays last year. Approvals for drugs have also picked up after USFDA concerns at some of the manufacturing units were addressed.
At the time of writing, Biocon share price was trading up by 0.5%.
Moving on to news from stocks in the IPO space. HDFC Standard Life Company Ltd. (HDFC Life) has come out with its initial public offering (IPO).
Prior to opening its offer to the public, HDFC Life raised Rs 23.2 billion from anchor investors through allocation of 80.6 million equity shares at Rs 290 per share, the upper end of the price band.
It would be the third life insurance company getting listed on bourses; and is the first initial public offering by a company promoted by HDFC, since the initial public offering of HDFC Bank in 1995.
HDFC Life is the first private life insurance company to register in India and was established in 2000 as a joint venture between HDFC Limited and Standard Life Aberdeen plc through its wholly owned subsidiary, Standard Life Mauritius.
HDFC Standard Life Company Ltd's IPO hits the market today, and will remain open till 9 November 2017. It has set a price band of Rs 275-290 and seeks to raise up to Rs 86.95 billion.
But do the company's fundamentals justify the price it is asking for in the primary market? We have released an IPO note, with our recommendation for the HDFC Life IPO, you can access it here.
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