Why Panacea Biotec Share Price is Rising

Just as a ray of sunshine can pierce through a cloudy sky, positive news can illuminate a stock's prospects. Panacea Biotec is experiencing such a ray of sunshine, with its share price surging by 31% in the past five days.

Panacea Biotec is a leading pharmaceutical company in India. It specialises in the development and manufacturing of generic drugs and active pharmaceutical ingredients (APIs). The company caters to both domestic and international markets. It serves a wide range of therapeutic areas.

This recent rally in Panacea Biotec's share price is due to a positive development that has boosted investor sentiment. To understand this, let's delve into the details of the agreement that has driven the company's share price higher.

#1 Settlement Agreement

Panacea Biotec's share price is rising significantly after the company settled a patent dispute with Sanofi, a French pharma giant. This settlement helped push Panacea's stock to its highest level in over three years.

Panacea had filed a lawsuit in the Delhi High Court to stop Sanofi Healthcare India from launching its Shan6 hexavalent vaccine, which Panacea claimed violated its patent for a similar vaccine, EasySix. Sanofi had already received approval to market Shan6 from India's drug regulator, prompting Panacea to take legal action.

After both companies presented their cases, Sanofi agreed not to manufacture or market any product that infringed on Panacea's amended patent claims. Following this agreement, the court closed the case on 13 September 2024.

As part of the settlement, Sanofi will not launch the Shan6 vaccine in India for now and will withdraw its opposition to Panacea's amendment application with the Indian Patent Office. Panacea, in turn, agreed to drop its claim for damages against Sanofi.

EasySix, Panacea's product, is India's first fully liquid hexavalent vaccine, with patents protecting it in multiple countries.

This settlement is seen as a significant win for Panacea Biotec. By preventing Sanofi from launching a competing product, Panacea secures its market position. This has boosted investor confidence, leading to the recent rise in its stock price.

Even before the settlement agreement the company's share price was on an upward trajectory. It rallied 165.1% in the past six months driven by sectoral tailwinds.

Let's take a look.

#2 Sectoral Tailwinds

Pharma stocks are recently on the rise due to multiple supportive factors. As a defensive sector, pharma is less impacted by economic slowdowns. This makes it attractive to investors worried about economic uncertainties. Thus, pharma stocks have received a boost, including Panacea Biotec.

The sector has seen increased sales and market share in the US generics market, with rising demand for branded pharma products. New product launches have also played a key role in boosting sales and expanding market share for pharma companies.

In India, the growth of the pharma sector has been driven by price increases and strong performance in chronic therapies.

Leading companies have predicted a high single-digit growth rate for FY25. The US market continues to grow steadily, helped by stabilising prices of existing products, rising sales, and new product introductions.

During the pandemic, many pharma companies built up inventory, expecting continued demand. However, a decline in raw material prices in later years reduced the value of this stockpiled inventory, affecting margins. This caused the sector to underperform even as the broader market rallied post-Covid.

Now, signs of recovery are emerging. As one of the largest exporters of pharma drugs, India is benefiting from strong US sales momentum. The increase in product launches in the US market is further fuelling the growth of Indian pharma companies.

Supported by these sectoral tailwinds, Panacea Biotec has seen its share price rise.

How Panacea Biotec Share Price has Performed Recently

In the past five days, Panacea Biotec share price has rallied 3%. In the last month, it is up 101.1%.

In 2024, so far its share price has rallied 165.8%. Additionally, it has surged 111.1% in the last year.

The stock touched its 52-week high of Rs 367 on 18 September 2024 and a 52-week low of Rs 112.7 on 4 June 2024.

About Panacea Biotec

Panacea Biotec is a global generic and specialty pharmaceutical and vaccine maker. It has offices in New Delhi, Mumbai, and Lalru. It has business interests in research, development, manufacturing and marketing of pharmaceutical formulations, vaccines, biosimilars, and natural products.

For more details about the company, you can have a look at Panacea Biotec's factsheet and Panacea Biotec's quarterly results on our website.

For a sector overview, read our pharmaceuticals sector report.

To know what's moving the Indian stock markets today, check out the most recent share market updates here.

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