Orchid Pharma shares gain after UTI-treatment drug gets USFDA approval post EU nod

Enmetazobactam was originally discovered and developed by Orchid Pharma and subsequently licensed to Allecra Therapeutics.

Allecra acquired the global (excluding India) development and commercialisation rights from Orchid.

The USFDA approval follows a positive recommendation for the drug's use in the European Union (EU) from the EU Committee for Medicinal Products for Human Use (CHMP).

Orchid Pharma will receive royalties in the range of 6% - 8% on the sales of Exblifep, translating to peak annual royalties of approximately $12-16 million.

Additionally, the company retains commercialisation rights for Enmetazobactam in India, where it is expected to achieve sales of around ₹ 200 crore, as estimated by Systematix.

Overall, Orchid Pharma's discovery and successful approval of Enmetazobactam represent a significant achievement in the pharmaceutical industry, with promising prospects for both global and domestic markets.

Nuvama estimated potential sales of $40 million in financial year 2025 and $80 million in financial year 2026 of the said drug. The royalty income is anticipated to contribute between 2% - 5% to Orchid Pharma's current core business revenue according to the brokerage which would translate to around $2 million in financial year 2025 and $5 million in financial year 2026.

Shares of Orchid Pharma are trading 2.5% higher currently at ₹1,247. The stock has risen 220% over the last 12 months.