Lupin climbs 3% as Morgan Stanley sees up to 32% upside

NEW DELHI: Shares of Lupin climbed 3 per cent in Thursday’s trade after Morgan Stanley maintained its overweight stance on the stock with a target of Rs 1,003 per share. The target is nearly 32 per cent above the prevailing market price of the scrip.

The foreign brokerage values the stock at 22 times expected FY21 EPS of Rs 45.60. It expects the stock to re-rate from 16 times currently. The monetisation of niche US products is the key, it said.

The drugmaker had on Wednesday informed BSE that it has entered into a licensing, development and commercialisation agreement with Boehringer Ingelheim for its MEK inhibitor compound as a potential targeted therapy for patients with difficult-to-treat cancers.

As per the deal, Lupin will receive an upfront payment of $20 million and potential additional payments for successful achievement of defined clinical, regulatory and commercial milestones for a total deal value of more than $700 million. Additionally, Lupin will be entitled to receive double-digit royalties on the sales of the product.

The shares of the company closed 3.24 per cent higher at Rs 765.55 on BSE.