KARACHI: Pharmaceutical company Ferozsons Laboratories has grabbed the spotlight with its stock hitting three ‘upper locks’ in as many sessions, adding Rs69 or 16 per cent to the share price which closed on Tuesday at Rs504.

The stock outperformed the benchmark KSE-100 index by 113pc during the last three months.

The euphoria has been generated after Ferozsons — the sixth largest publicly listed pharmaceutical company (in terms of sales) — announced that it entered into an agreement with an American company, Gilead Sciences, under which it would market and distribute new revolutionary Hepatitis-C treatment drug ‘Sovaldi’ in Pakistan.

This agreement has finally been endorsed by the Drug Regulatory Authority of Pakistan (DRAP) which will allow Ferozsons to start distribution of the drug by Dec’14.

Analyst Jehanzaib Zafar at BMA Capital Management Ltd stated that reports suggested that the complete treatment would cost Rs330,000 per patient.

Another sector analyst said that DRAP has finally fixed price of Sovaldi at Rs1,940 for each tablet. The company will make available a pack of 28 tablets for total price of around Rs55,000 after final approval by the federal government.

Analyst Zafar stated: “We have presented a sensitivity analysis to assess the impact of ‘Sovaldi’ sales on Ferozson’s earnings. As per WHO’s reports, 5pc of the country’s total population, or 9m individuals, is carrying the disease and roughly 250,000 new patients join the list every year.

“Our preliminary analysis shows that if 30,000 patients take the new treatment, the annualised impact on company’s bottom-line is of Rs33 per share (assuming Net margin of 10pc against current margin of 16pc).”

Analysts said that the company was already in good health. At Sept 30, 2014, total assets of Ferozsons stood at Rs3.262 billion.

Against the paid-up capital of Rs302 million, accumulated profit was Rs2.136bn.

For quarter ended Sept 30, 2014, Ferozsons posted consolidated sales at Rs876m up from Rs882m YoY and profit after tax at Rs127m, up 20pc from PAT at Rs106 in the corresponding period last year.

Published in Dawn, November 26th, 2014