Wockhardt shares zoom 19% to hit one-year high; here's why

Shares of Wockhardt Ltd rose sharply in Monday's trade, pausing their four-day downward trend. The stock soared 18.88 per cent to hit one-year high of Rs 398.95 over its previous close of Rs 335.60. The multibagger scrip has gained 174.48 per cent from a 52-week low of Rs 145.35, a level seen earlier on March 29 this year.

Today's rise came after the company announced that it has completed the pivotal Phase 3 pneumonia study of its macrolide antibiotic Nafithromycin WCK 4873.

"Wockhardt NCE, WCK 4873 named as Nafithromycin was comparatively evaluated in multi-centre double blind Phase 3 pneumonia study employing the last-line respiratory antibiotic Moxifloxacin. The results of the study showed that an ultrashort course of three-day treatment with Nafithromycin is as effective as seven-day therapy with Moxifloxacin. The findings of Phase 3 study are in line with Phase 2 study conducted in the US and Europe. A human lung penetration study conducted in the US revealed that Nafithromycin possesses a remarkable feature of sustained high lung concentration built-up over five days following just three days of dosing. Human Lung exposure of Nafithromycin is 8 times higher than Azithromycin and potency being 10-100 times higher for certain respiratory pathogens," the pharma firm stated.

"In Phase 3 study, three-day treatment with Nafithromycin resulted in clinical cure for 96.7 per cent of patients as against clinical cure rate of 94.5 per cent in Moxifloxacin arm. The Phase 3 study outcome establishes broadspectrum efficacy of Nafithromycin against Gram-positive respiratory pathogens, fastidious Gramnegative pathogens as well as therapeutically challenging intracellular atypical pathogens such as Mycoplasma pneumoniae, which were recently implicated for the surge of hospitalisations in China due to pneumonia," it added.

Wockhardt further underscored that the study establishes that Nafithromycin represents a first ever macrolide in 30 years which has successfully completed clinical development for the indication of community acquired bacterial pneumonia. The currently available macrolide antibiotics Azithromycin and Clarithromycin were approved in 1988 and 1991, respectively.

On BSE, around 5.50 lakh shares were last seen changing hands. The figure was way more than the two-week average volume of 1.19 lakh shares. Turnover on the counter stood at Rs 21.02 crore, commanding a market capitalisation (m-cap) of Rs 5,482.09 crore.

DRS Finvest founder Ravi Singh said, "One can buy Wockhardt shares for a target price of Rs 450, keeping stop loss placed at Rs 375."

Jigar S Patel, Senior Manager - Technical Research Analyst at Anand Rathi Shares and Stock Brokers, "The stock has support at Rs 350 and resistance around Rs 420 level."

AR Ramachandran from Tips2trades said, "Wockhardt is bullish but also overbought on daily charts with next resistance at Rs 413. Investors should book profits at current levels as a daily close below support of Rs 358 could lead to target of Rs 269 in the near term."

The counter was trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150- and 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 76.49. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a negative price-to-equity (P/E) ratio of 8.40 against a price-to-book (P/B) value of 3.16.

The scrip has a one-year beta of 0.7, indicating low volatility.

(Disclaimer: Business Today provides stock market news for informational purposes only and that should not be construed as investment advice. Readers are encouraged to consult a qualified financial advisor before making any investment decisions.)

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