Dr.Reddy’s Labs did not react as much yesterday when it said that it struck a deal for Russia’s vaccine for Covid. But today, it went on to hit a new record high at Rs.5302.85 with almost 4 times surge in volumes and figuring among the top five gainers on the BSE.
The stock price has surged on its announcement yesterday after market hours that it had settled patent litigation with US-based Bristol-Myers Squibb's unit, Celgene, over cancer treatment Revlimid.
In settlement of all outstanding claims in the litigation, Celgene has agreed to provide Dr Reddy's Labs with a license to sell volume-limited amounts of generic lenalidomide capsules in the US beginning on a confidential date after March 2022 and will get a license to sell an agreed-upon percentage of volume till January 2026.
Brokerage houses who track the stock say that this is a good move as the company can launch the generic version of Revlimid in the USA, expected around Sept 2022 and is likely to get a license to sell an agreed-upon percentage of volume till January 2026. Revlimid generic cashflows are pegged by Citi at around $700 million.