India-based Glenmark Pharmaceuticals has secured regulatory approval for the manufacturing and marketing of antiviral drug Favipiravir under the brand name FabiFlu to treat mild to moderate Covid-19. The Drug Controller General of India (DCGI) has approved the use of Favipiravir only for emergency use in treating mild to moderate cases of Covid-19 infection.
According to the company, Favipiravir demonstrated promising clinical evidence, with positive results in mild to moderate Covid-19 cases. Clinical improvement was observed in age groups of 20 to > 90 years.
The drug is said to provide a rapid decrease in viral load within four days, along with quicker symptomatic and radiological improvement. Favipiravir demonstrated up to 88% of clinical improvement in patients with mild to moderate Covid-19.
Glenmark said that mild to moderate Covid-19 patients with co-morbid conditions such as diabetes and heart disease can also use the drug.
If the drug proves to be efficacious for Covid-19 treatment, Glenmark will cash in on first-mover advantage. This will likely boost the company’s sales and there is no visibility on the impact of the drug on the company’s business and is expected to have a ramp-up in drug sales independent on a load of patients and how the pandemic develops.
It is moderately priced as compared to the competing drug Remdesivir, which too has received emergency drug approval for a treatment for Covid-19 with severe conditions and is likely to be made available by June end at around Rs 5,000 a dose while Favipiravir priced at Rs 103 a tablet and Rs 3,500 for the complete course of medication.
Glenmark Pharma’s domestic sales may get a boost in the near term as the company has received approval for the manufacturing and marketing of Favipiravir. In recent years, high expenses towards R&D and headwinds to its US business have adversely impacted them. The Glenmark stock is trading at a historically lower valuation of 16 times its trailing four quarters consolidated earnings which is less than half of the price-to-earnings multiple of 35 of the ET Pharma Index.
The launch of this anti-viral drug has the potential to be a game-changer for Glenmark’s fortunes on the Street as well as off it. The company has been on a restructuring mode with a reduction in R&D expenses and employee cost and reduction in debt is going to be the key confirmation for the Street to buy into the company’s turnaround story.