IOL Chemicals announced yesterday that its product, “Ibuprofen,” has received approval from the Center for Drug Evaluation (CDE) of the National Medical Products Administration (NMPA), China.

This approval authorizes the company to export Ibuprofen to the Chinese markets.

Ibuprofen is a widely used non-steroidal anti-inflammatory drug (NSAID) effective in relieving pain, reducing inflammation, and lowering fever.

This is good news because this deal opens the Chinese pharmaceutical market to IOL for ibuprofen exports as China is a massive consumer of OTC drugs, especially pain relief meds.

IOL has been heavily dependent on Europe and India and China’s entry can offset margin pressure from falling global prices, that is, if they can scale volumes fast enough.

This is a rare win as very few Indian API makers get regulatory clearance in China, due to complex bilateral trade dynamics.

Definitely, a credibility boost for IOL Chemicals.

Exports to China from IOL were negligible and now with this approval, export share to China could rise to 5 to 8% in the next 12 to 18 months. Management is expected to announce supply contracts or strategic partnerships soon.

This development has boosted the stock price of IOL Chemicals; from its close of Rs.65.42, the stock opened higher at Rs.67.90 and rose further to an intraday high at Rs.69.89.