Shares of Zydus Lifesciences surged 2.9% to ₹1,157.7 on Friday, briefly topping ₹1,167.3 before settling near the ₹1,157 mark. The rally followed Bernstein’s decision to keep its "Outperform" rating and lift the target price to ₹1,457, a 28% upside from the Thursday close of ₹1,135.10.
Bernstein’s new target eclipses the consensus of 34 analysts, who collectively project a modest 8% upside from current levels. The brokerage noted that its figure is the highest among peers, reflecting confidence in the drug’s commercial prospects.
The catalyst behind the rating hike is Novartis’ choice to discontinue its VHB937 amyotrophic lateral sclerosis (ALS) candidate on September 16. This move removes a direct competitor and strengthens the market landscape for Zydus’s oral ALS therapy, Usnoflast, which targets a distinct biological pathway. Bernstein highlighted the drug’s Phase IIb efficacy, oral dosing profile, and orphan designation in the U.S., all of which could support an annual revenue run‑rate of about $100 million if clinical outcomes remain favorable.
Analyst sentiment is mixed: 19 analysts recommend "Buy," 9 hold, and 6 sell, underscoring divergent views on the ALS pipeline. Yet Bernstein’s bullish stance stands out, citing the potential for priority review by the U.S. FDA and a broad ALS patient base.
Looking ahead, Zydus could see a significant upside if Usnoflast moves into Phase III and secures positive data. The company’s shares have already climbed 27% year‑to‑date, and the ALS drug could become a key revenue driver, bringing the company closer to its goal of a diversified, high‑margin portfolio.