Analysts attribute the interest in the scrip to Ranbaxy's plans of sealing a licensing deal for its new research molecule for the management of benign prostatic hyperplasia (BPH). The global market for drugs to treat BPH is expected to touch US $3 billion by 2003, and marketmen feel that Ranbaxy could examine an alliance on the lines of that of the Hyderabad-based Dr Reddy's Laboratories (DRL). Speculation is rife that Ranbaxy mayhave opened talks with Bristol Myers Squibb or Pfizer or even Glaxo on a possible R&D-based alliance.

DRL had licensed two of its research molecules--an insulin sensitizer molecule (DRF 2593) and a blood glucose and dyslipidemia regulating compound (DRF 2725)-to Danish multinational Novo Nordisk. DRL has already raked in milestone payments aggregating around $6.25 million on this account. An analyst with a Mumbai-based stockbroking house, however, cautioned that many Indian drug houses may also be attempting to improve their market cap, with an eye on the impending product patent regime. "It is a well known fact that a higher market cap could facilitate a better price, if a sell out is envisaged," he said, without making any direct reference to the Ranbaxy scrip. Another pocket of analysts, however, believes that the Delhi-based Ranbaxy Labs has "much bigger" plans on the research and development front, though no official confirmation on any of views could be got. An analyst with 20th Century AssetManagement Corporation, Jesal Shah, said, "Companies like Dr Reddy's Labs and Ranbaxy are quite capable of developing patentable molecules or analogues. The stock run up could possibly be on account of anticipated developments on the research front."

Ranbaxy had, in 1998, filed its first ever investigational new drug application (INDA) for its BPH molecule. The company claims to have built up capabilities to deliver "one IND every 18 months". The Rs 1,336 crore Ranbaxy, with 80 scientists on its rolls, has been working on research projects in the area of anti-infectives, cardiovasculars, and oncology.Ranbaxy's new drug discovery research (NDDR) efforts are supported by government owned R&D institutions and Laboratories. The company was, in March 1998, involved in seven collaborative projects in alliance with the Council of Scientific and Industrial Research (CSIR), though progress on these could not be ascertained.

The company also has in place a research-based collaborative agreement in the UK andanalysts expect atleast "two more such deals to be on the anvil".