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Sun Pharma hits record high; hopes of higher sales in key drug

A pharmacists sorts free medication provided by the government, which will be given to patients, at Rajiv Gandhi Government General Hospital (RGGGH) in Chennai July 12, 2012. REUTERS/Babu/Files

Reuters Market Eye - Sun Pharmaceutical Industries Ltd(NSI:SUNPHARMA.NS - News) touched an all-time high of 587 rupees in trade on Thursday on hopes of higher sales of its key cancer drug, Doxil, after innovator Janssen Pharmaceuticals Inc, a unit of Johnson & Johnson (J&J)(NYS:JNJ - News) said on Wednesday the drug will likely be in short supply in the coming weeks.

The expected shortage in supply is due to an interruption from the company's own supplier, Ben Venue Laboratories Inc, J&J said.

J&J cannot provide an estimate of when the cancer drug would be available again and has advised healthcare providers to contact Sun Pharma.

Analysts tracking the sector say Sun Pharma already has 50 percent of the market share in this drug which will get a further boost after this development.

Credit Suisse initiates coverage on the company's unit, Taro Pharmaceutical Industries Ltd (TARO.N), with an "outperform" rating and a target of $85, saying improving growth visibility, was seen helping the shares.

Sun Pharma shares ended at 581.30 rupees, up 2.16 percent.

(Reporting by Abhishek Vishnoi)