The stock of Aurobindo Pharma surged as much as 8 per cent to Rs 795 in early trades today. This was thanks to the company receiving final approval to manufacture a limited competition high-margin generic drug in the US.

Aurobindo Pharma has received final approval from the US Food & Drug Administration (US FDA) to manufacture the tablet version of 800mg Sevelamer Carbonate. This is prescribed for the control of serum phosphorus in patients with chronic kidney disease (CKD) on dialysis.

Sevelamer Carbonate tablets are the therapeutic equivalent generic version of Genzyme’s Renvela tablets. The approved product had an estimated market size of $1.9 billion for the 12 months ending May 2017. The product is being launched immediately.

Aurobindo Pharma is the first generic company to receive approval for Sevelamer from the regulator, while companies including Lupin, Cipla and Actavis, have filed for the product.

There will be limited competition for Aurobindo in the generic space for Sevelamer in the near term as most peers have indicated a FY-19 timeframe for approval. Earlier in mid-June 2017, the company had received approval to manufacture Sevelamer Carbonate oral suspension with 0.8 gm and 2.4 gm, which have an estimated market size of $140 million in the US.

The stock had rallied after announcement of its March 2017 quarter results; this was due to a strong growth outlook despite the company reporting a year-on-year fall in its consolidated revenue and net profit during the fourth quarter. The sanguine outlook seems to be fructifying.

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