Astrazeneca Pharma slumped yesterday after news came in that it has lost the patent plea on its cancer drug to two domestic companies. The Intellectual Property Appellate Board (IPAB) has dismissed the appeal filed by AstraZeneca challenging an earlier order refusing patent protection for cancer drug Gefitinib, used in treatment of breast, lung and other cancers. This is a victory for two domestic companies, especially GM Pharma and Natco Pharma. The drug in question, Gefitinib is being sold for Rs1 lakh for a 30-capsule bottle while Natco has been selling the generic version of the drug in the Indian market since 2004 at Rs10,000. This is a big blow for Astra and it now has the option of taking the case to India's Supreme Court.

The company did not have a very good Q2FY13 as it reported a  net loss at Rs 45.12 crore, which has gone up over 5 times from the net loss at Rs.8.15 crore in Q1FY13. Very high operating costs, especially employee benefit expenses on a muted topline (QoQ) pushed the company into the red. Deferred tax of Rs.21 crore pumped up the losses in current Q2. The stock enjoys a high amount of investor given the fact that it a MNC, is debt free and more importantly, has a promoters stake at 90%, making it a strong delisting candidate, especially on the back of this poor performance.