Shilpa Medicare shares rallied 16% today; Here's why

Shilpa Medicare shares climbed 16 per cent in Friday's trade after the drug maker post market hours of Thursday said a CDMO customer reported positive results from pivotal clinical trial and placed binding purchase order for a drug used to treat kidney diseases, which would result in $10 million as milestone income spanning over filing, approval and launch of the product.  

Shilpa Medicare Ltd said Unicycive Therapeutics, a CDMO customer, has reported positive results from pivotal clinical trial of Oxylanthanum Carbonate (OLC), a NCE molecule with potential treatment for hyperphosphatemia in chronic kidney disease patients which has several benefits for various patients in this chronic disease. 

Unicycive is expected to file the New Drug Application for OLC by mid-2024 with potential approval by mid-2025, Shilpa Medicare said in a BSE filing.

Following the development, the stock rose 15.77 per cent to hit a high of Rs 669.35 on BSE.

"SML has partnered with Unicycive to provide end-to-end CDMO services right from development & supply of APIs to finished dosage form. Based on the outcome of the pivotal clinical studies, Unicycive has entered into long term manufacturing and supply agreement with SML and agreed to place a binding purchase order for supply of OLC tablets by June 30, 2025," Shilpa Medicare said.

Besides, Unicycive has agreed to place orders for additional tablets to be delivered between December 31, 2025, and June 30, 2026. Apart from the supply arrangement, Shilpa Medicare is expected to receive $10 million as milestone income spanning over filing, approval and launch of the product. 

In anticipation of increased product demand Unicycive will also fund the establishment of new manufacturing block at Shilpa’s site. Earlier this week, a  material subsidiary of Shilpa Medicare, Shilpa Pharma Lifesciences, received  ‘IND A+’ from India Ratings for its long-term issuer rating.