September 27, 2018 / 6:56 AM / a year ago

BUZZ-HSBC hikes PT for India's Dr.Reddy's, says optimism continues on critical ANDAs

** HSBC raises target price for Dr.Reddy’s Laboratories Ltd to 2,315 rupees from 2,165 rupees, maintains rating at “hold”

** HSBC says co’s earnings recovery continues to hinge on its big three Abbreviated New Drug Applications (ANDAs) - Suboxone, NuvaRing and Copaxone, while competitive pressure remains for its base U.S. business

** While the outcome of an appeal against adverse preliminary injunction (PI) for its generic opioid drug gSuboxone is awaited, improving pickup in Sublocade prescriptions (by rival Indivior Plc) could also shrink the benefit from gSuboxone for co - HSBC

** HSBC says it believes upside from key ANDAs is already priced in and reflected in earnings growth forecasts for FY19 and FY20, but outcome of the PI appeal for gSuboxone and development around pending cGMP (good manufacturing practices) issues could swing stock price in either direction - HSBC

** Seventeen of 39 brokerages covering stock rate it “buy” or higher, 12 “hold” and 10 “sell” or lower; median PT 2,327.50 rupees - Thomson Reuters Eikon data

** Dr.Reddy’s shares fall 2.5 pct to 2,535.50 rupees

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