Amid US legal woes, analyst urges caution on generic pharma stocks; recommends Cipla

The current market conditions warrant a careful approach to generic pharmaceutical companies. Vishal Manchanda, Pharma Analyst at Systematix Group advises investors to consider an exit strategy for their holdings in some of the generic players.

Dr Reddys and numerous other pharmaceutical companies have been cited as defendants in a legal case filed in a US court under anti-trust legislation. The lawsuit, which relates to the generic cancer medication Revlimid, was submitted by Mayo Clinic and Lifepoint Corporate Services in the U.S. District Court for the Northern District of California.

Revlimid, a cancer medication originally developed by pharmaceutical firm Celgene, which is presently a subsidiary of Bristol Myers Squibb (BMS), is employed in the treatment of various blood cancer patients. The US pharmaceutical company, BMS, reached agreements with several generic companies to distribute restricted quantities of generic Revlimid in the United States beginning in March 2022.