Shares of Cadila Healthcare and IPCA Labs that manufacture Hydroxychloroquine, a drug that is likely to help treat COVID19, surged up to 18 percent on Monday, in an otherwise weak market.

Share Market Live

NSE

The US President Donald Trump touted last week that generic malaria drug hydroxychloroquine has been used with some success in treating Covid-19.

IPCA Labs rallied 17.7 percent to Rs 1,615.70 per share on BSE, while Cadila Healthcare surged as much as 7.3 percent to Rs 307.

The sentiment was also positive as USFDA partially lifted an import alert on Ipca Laboratories' two plants to ensure the supply of chloroquine tablets.

In a filing to the BSE, Ipca on Saturday said the USFDA had made an exception to the import alert to its plants for the products in question. APIs for hydroxychloroquine sulphate and chloroquine phosphate are produced at Ipca’s Ratlam unit, Madhya Pradesh, while the formulation is produced at Pithampur, Madhya Pradesh, and Piparia, Silvassa (headquarters of Dadra and Nagar Haveli).

Pankaj Patel, chairman of Cadila Healthcare, said the firm was producing 20 tonnes of Hydroxychloroquine per month and had started ramping up production.

“We are ramping up our capacity and are geared up to supply enough for the Indian market. There would be no shortage of this drug here. Moreover, most of the raw material used is fortunately available locally,” he added.

Meanwhile, the brokerages remained bullish on Cadila. Morgan Stanley has an overweight call on the stock with a target at Rs 304 per share, whereas CLSA maintained a buy call on the stock with a target at Rs 330.

As per CLSA, Hydroxychloroquine could be a huge near-term opportunity for the company.