Divi’s Laboratories Ltd. said the U.S. drug regulator has removed an import alert on its Visakhapatnam unit, paving the way for the company to sell medicines in the crucial market.
U.S. currently contributes 33 percent of Divi's Laboratories' total sales, Edelweiss Securities said in a report earlier. The import alert was imposed in March, but some of the larger products were exempted given the drug supply situation in the U.S., the brokerage added.
The lifting of this import alert will eliminate a downside risk for the company's earnings in the coming quarters, the brokerage house had said. The development could boost Divi's Laboratories' sales by 5 percent in the long term, said pharmaceutical analyst at Prabhudas Lilladher, Surajit Pal, to BloombergQuint when the U.S. Food and Drug Administration had spoken about removing the ban.
Shares of the drugmaker rose as much as 3.5 percent to Rs 1,060 apiece, making them the best performers on the NSE Nifty Pharma while the 10-member index slipped 0.6 percent in early trade.