2020 saw the stocks of Pharma companies rise as the pandemic struck India. This has led to the Pharma sector recovering from its earlier stagnant performance. Presently, in 2021, it continues to be one of the best-performing sectors.
Moreover, Pharma companies have been doing well as the demand for immunity boosters and life-saving drugs takes precedence in the aim to save lives. Further, with the virus posing threats to come back stronger, all eyes are on this sector to bail the country out of the pandemic.
Following is a closer look at 5 companies that are benefitting from the vaccination drive.
Cadila Healthcare (Zydus Cadila)
Cadila Healthcare has produced ZyCoV-D, the first vaccine built on a DNA platform. Moreover, it has received a EUA (emergency use authorisation) from a regulator. This is India’s second home-grown vaccine after Covaxin. It comes in 3 doses and has an efficacy rate of 66.6%.
For the June quarter of 2021, Cadila Healthcare witnessed a 29.3% rise in net profit Year-On-Year. Moreover, because of the frantic sales in the Indian market, it has witnessed a revenue increase of 14.5% Year-On-Year.
Cipla is an Indian pharmaceutical company noted for manufacturing drugs for cardiovascular diabetes and respiratory diseases. The go-ahead signal from the Drugs Controller General of India (DCGI) has been given to import into India Moderna’s Covid 19 vaccine.
Moderna’s vaccine has an efficacy rate of 94.1%. It will be imported in a ready-to-use form. At the prescribed temperature, it can be stored for 7 months, but if a vial is opened, it can be used for 30 days.
As of June 2021, Cipla reported 24% rise in net profits Year-On-Year. Moreover, revenue also saw an increase of 27% Year-On-Year. The company has massively benefitted from the impact of the second wave of Covid-19.
Dr Reddy’s Laboratories
Dr Reddy’s Laboratories has decided to market the first 250 million doses of the Sputnik V vaccine in India. It entered into a partnership with the Russian Direct Investment Fund. Sputnik V is a double-dose vaccine with an efficacy of 91.6%.
Moreover, from September 2021, the company is likely to begin the production of this vaccine. However, for the first quarter of June 2021, the company saw a dip in operating profits. Profits declined 13% Year-On-Year while there was a marginal slump in profits of Rs. 5.7 billion.
This company has ties with Dr Reddy’s, Human Vaccine LLC, and Generium (a Russian-based firm) to manufacture around 25 million doses of Sputnik V. Panacea is acting as an in-between for Generium and Dr Reddy’s. They are responsible for producing the vaccine using products from Generium and distributing it to Dr Reddy’s for supply all over the country.
For June 2021, the net loss for Panacea Biotec widened to $574 million from $341 million. Unfortunately, revenue is still flat for this company.
Wockhardt is another company that has inked a deal to supply the Sputnik V and Sputnik Light vaccine. The company and Dubai-based Enso Healthcare and Human Vaccine LLC made the deal. Human Vaccine LLC is a subsidiary of the Russian Direct Investment Fund, which is the sovereign wealth fund of Russia.
Moreover, Wockhardt is likely to supply 620 million doses of Sputnik V and Sputnik Light vaccines to Enso. Moreover, during the June 2021 quarter, this company was granted 3 patents and presently holds 766 patents. However, it reported a Rs. 65.8 million loss for the first quarter ending June 2021. Further, the company has made a profit of Rs. 7.5 billion.
Before investing in any of the pharma stocks, try to find out how far along is the vaccine’s approval. Some companies may already have their vaccine out in the market, while others may just be getting the manufacture set up.
Also, look out for which companies have obtained all the necessary clearances from regulators. Moreover, choose those companies with other products ready to release in the future as that indicates a profitable long-term plan.
Frequently Asked Questions
- How many doses of ZyCoV-D does Zydus Cadila hope to make?
Cadila Healthcare hopes to manufacture around 100m to 120m doses of ZyCoV. Moreover, they are stocking up on the vaccine.
- What sort of pharma company is Wockhardt?
First, Wockhardt is an Indian pharma and biotech company. It produces various products such as formulations, vaccines, biopharmaceuticals, nutrition products, and APIs (active pharmaceutical ingredients).
- Was pharma one of the top-performing sectors in 2020?
Yes, after a stagnant phase, pharma recovered to become one of the top-performing sectors in 2020.