Lupin trades with traction on the bourses

Lupin is currently trading at Rs. 1113.05, up by 19.40 points or 1.77% from its previous closing of Rs. 1093.65 on the BSE.

The scrip opened at Rs. 1094.00 and has touched a high and low of Rs. 1118.20 and Rs. 1094.00 respectively. So far 88879 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 2 has touched a 52 week high of Rs. 1118.20 on 25-Jul-2014 and a 52 week low of Rs. 742.30 on 28-Aug-2013.

Last one week high and low of the scrip stood at Rs. 1118.20 and Rs. 1071.90 respectively. The current market cap of the company is Rs. 49968.78 crore.

The promoters holding in the company stood at 46.73% while Institutions and Non-Institutions held 42.72% and 10.55% respectively.

Lupin and some US drug makers looking for a tax-saving deal in Europe and private equity funds are planning to bid for a range of older drugs being auctioned by GlaxoSmithKline (GSK). GSK is looking to divest the mature products in a bid to improve its growth profile and wants to dispose of off-patent drugs marketed in North America and western Europe with annual sales of around $1.7 billion. Assuming a multiple of between two and three times those sales, the assets on the block could fetch between $3.5 billion and $5.0 billion.

In April GSK was reviewing its portfolio of mature drugs, known as established products, and in May the group invited sector players and private equity firms to consider bidding. Non-binding offers are expected before the end of the month, according to several sources who asked not to be named because the talks are private. GSK brands up for sale include antidepressant Paxil, migraine treatment Imitrex, Zantac for stomach acid and Zofran for nausea. Lupin wanted to enhance its branded generics business in the United States and a company official confirmed it was looking for deals. For these billion-dollar companies like GSK, such fringe products add flab. On the other hand, a smallish Indian player can do very focused promotion and gain scale with increased penetration. The GSK portfolio could also appeal to US speciality pharma firms, which may be able to use the transaction to reduce their tax bill by moving their tax address outside the United States, a practice known as tax inversion.

Mylan carried out a similar deal last week when it agreed to buy Abbott Laboratories' branded speciality and generics business in developed markets outside the United States for $5.3 billion, or around 2.7 times sales. Private equity firms are also looking at the GSK products, although GSK does not plan to sell the factories and sales forces needed to make and market the medicines, which may deter some. That means private equity would have to outsource manufacturing and distribution operations, or team up with an industry player, unless GSK is persuaded to compromise and offer infrastructure for some of the drugs. An asset combination with a rival large drugmaker selling the same type of non-core assets, like France’s Sanofi, could also be explored if GSK failed to sell the assets in the current auction. Sales of the 50 or so older medicines in GSK’s established products portfolio totalled $1.4 billion in the first quarter of 2014, down 11 per cent on a year earlier, and revenues are expected to decline further this year due to increased competition from cheaper generic copies.