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Virus-Drug Nod Spurs Record Rally in India’s Glenmark Pharma

Virus-Drug Nod Spurs Record Rally in India’s Glenmark Pharma

Shares of India’s Glenmark Pharmaceutical Ltd. climbed the most on record after it received approval to manufacture and sell a coronavirus treatment.

The nation’s drug regulator approved manufacture and marketing of Glenmark’s oral antiviral drug FabiFlu, or favipiravir, for the treatment of mild to moderate virus patients. The news sent the drugmaker’s share up as much as 40%. India also gave the nod to Cipla Ltd.’s Cipremi, or remdesivir, for use as an emergency treatment of Covid-19, pushing up its stock as much as 9.4%.

The two stocks were the biggest boosts to the S&P BSE Healthcare Index, which rose 2.4% on course for its highest close since September 2016. Glenmark has surged 55% in 2020 and Cipla is up 39% as the outbreak has driven up expectations for healthcare stocks.

Virus-Drug Nod Spurs Record Rally in India’s Glenmark Pharma

“If the drug efficacy for mild and moderate patients gets established in Glenmark’s completed clinical trials in India, it will be a boost for India’s efforts to control Covid-19 as it may lower the load on our health-care systems and reduce the mortality rate,” Nitin Agarwal and Nirmal Gopi, analysts at Mumbai-based IDFC Securities Ltd. wrote in a note. “Exports are potentially the bigger opportunity versus domestics,” said the analysts, who have an outperform rating on the drugmaker.

There have been 425,282 confirmed cases of the virus in India with 13,699 deaths, according to data from John Hopkins University. While the nation has begun reopening from the world’s most extensive lockdown, new virus hotspots are emerging in rural communities.

Favipiravir, also known as Avigan, was created as a flu treatment by a unit of Japan’s Fujifilm Holdings Corp. A Chinese study of the drug showed it helped clear the coronavirus in patients earlier than an antiviral HIV medication. Remdesivir, an experimental antiviral drug that Gilead Sciences Inc. originally made as a treatment for Ebola, has been shown to help patients recover from Covid-19 faster than standard care alone.

Glenmark claims FabiFlu is effective in patients as young as 20 years old and as old as 90, and can be used in those who also have conditions like diabetes and heart disease. The company said the drug has been shown to cause a rapid reduction in a patient’s viral load within four days, and results in faster improvement in both symptoms and radiological evidence of the disease.

©2020 Bloomberg L.P.