What is ICICI Securities betting on from the pharma space?

The pharma space has been abuzz after the Glenmark-Sanofi deal. On Monday, Glenmark Pharmaceuticals entered into an agreement with French drug maker Sanofi-Aventis to grant the latter a license for the development and commercialization of novel agents to treat chronic pain.

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Glenmark licensed its chronic pain molecule to Sanofi-Aventis for an upfront payment of USD 20 million (approximately Rs 89 crore), in a cumulative deal of USD 325 million (Rs 1,449 crore).



Commenting on the same, Rajesh Vora of ICICI Securities said the Sanofi deal is good for Glenmark. "The deal has come after a lull of two years for Glenmark and should result in a 22% spike in FY11 EPS," he stated.



According to Vora, investor perception about Glenmark should improve as the company continues to monetise its world-class research and development pipeline.



Today, Par Pharmaceutical has entered into an exclusive licencing agreement with Glenmark Generics for Zetia. Commenting on the same, Vora said the deal with Par Pharma for Zetia is a de-risking strategy for Glenmark.



ICICI Securities has revised Glenmark's target to Rs 379, he added.



He feels the next 18 months is likely to be significantly positive for Dr Reddy's Laboratories.



Vora is also bullish on Ranbaxy. "The company will see a turnaround on the Valtrex generic in the current quarter."