Shilpa Medicare stock rises 17% on positive clinical results for kidney disease drug. Should you hold or sell?

Shilpa Medicare’s share price rose 17% during Friday’s trading session, hitting a 52-week high, after the release of encouraging results from a key clinical trial on oxylanthanum carbonate by Unicyctive Therapeutics, Inc., one of the company’s contract development and manufacturing organizations (CDMO).

According to the company’s filing, oxylanthanum carbonate is an NCE molecule that can cure hyperphosphatemia in individuals with chronic kidney disease. It also offers different benefits for different people with this chronic disease.

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Shilpa Medicare’s share price opened today at an intraday low of ₹598.05 per share, and the stock reached an intraday high of ₹677 each.

“Shilpa Medicare share price has formed a structure of higher peaks and higher lows and is thus in an uptrend. However, according to historical data, the resistance is at ₹700. It remains to be seen whether the stock will break out of its uptrend and continue. Fresh purchases are not advisable, but investors can hold existing positions,” said Ruchit Jain, senior research analyst at 5paisa.

According to data from Trendlyne, Shilpa Medicare’s share price has risen 120.69% in the past year, outperforming its sector by 62.66%.

Rajesh Bhosale, Equity and Derivatives Analyst at Angel One highlighted that Shilpa Medicare share prices have had a strong gap up and further upside is expected with prices up more than 14% supported by strong volumes. We can expect further upside towards 750 in the coming week.

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As stated in the application, Unicycive plans to submit the New Drug Application for oxylanthanum carbonate by mid-2024. Approval could occur in mid-2025.

Unicycive and the Company have signed a long-term manufacturing and supply agreement based on the results of the pivotal clinical trials. Unicycive has also committed to place a legally binding order for the supply of OLC tablets by June 30, 2025. In addition, Unicycive has committed to order additional tablets, which are scheduled for delivery between December 31, 2025 and June 30, 2026.

In addition to the supply agreement, the Company expects to receive milestone revenue of $10 million for the filing, approval and launch of the product. In addition, Unicycive will fund the construction of a new production block at the Shilpa site to meet increasing product demand.

According to the company’s latest filing, the U.S. Food & Drug Administration (FDA) conducted an inspection of Shilpa Medicare’s facility in Nacharam, Hyderabad, Telangana from February 26 to March 1, 2024.

At the end of the inspection, there were no points for discussion and only zero 483 observations. With the publication of the Establishment Inspection Report (EIR), this inspection is now complete. The facility has a classification of “No Action Indicated” (NAI).

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Shilpa is a comprehensive pharmaceutical company with commercial interests in polymers, peptides and specialty oncology and non-oncology APIs. It also offers a carefully curated biologics portfolio and unique end-dose formulations such as transdermal patches and orally dispersible films.

Shilpa covers all business segments and provides comprehensive CDMO services to multinational pharmaceutical companies, thanks to its robust R&D and manufacturing capabilities, reinforced by four R&D units and seven manufacturing sites.

Disclaimer: The views and recommendations mentioned above are those of individual analysts, experts and brokerage firms and not of Mint. We advise investors to check with certified experts before making any investment decision.