The stock of Sun Pharmaceutical Industries sustained the rally at the bourses to hit an all-time high of Rs 587 on Thursday. While the stock has been on a song ever since the company announced strong financial performance for the June quarter on August 12, positive cues from the US drug authority also boosted sentiments.

The stock may get another push on expectations that sales of its key cancer drug Doxil will rise in the US following Janssen Pharmaceuticals Inc’s (a unit of Johnson & Johnson) admission of short supply.

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

Sun Pharmaceuticals and J&J have 50 per cent market share each in this drug segment.

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

According to analysts tracking the sector, Sun Pharma will get a further fillip after this development.

Barclays Capital, which reiterates its overweight stance on Sun Pharma with a price target of Rs 600, said: “We believe Sun Pharma will directly benefit from the reduced competition on Doxorubicin. Sun’s TRx growth in Doxorubicin had been declining recently and this news is likely to be a shot in the arm for Sun’s generic Doxorubicin, in our opinion.”

In February, 2013, Sun Pharma received approval for its generic Doxil, which has sales of nearly $300 million. “The product is expected to have contributed $120-130 million in CY2012 for Sun Pharma and hence is a key player in the market along with J&J. Thus, any disruption on the back of the same would be significant for the company,” said Sarabjit Kour Nangra, Vice-President-Research, Pharma, Angel Broking.

Market capitalisation of the company has risen to Rs 1.2 lakh crore from about Rs 23,150 crore on March 31, 2008. The BSE S&P Sensex and the Nifty posted flat return during the period (point-to-point basis).

Citi, which met Sun Pharma officials at its Citi India Pharma Corporate Day recently, believes Sun deserves a high premium to the market and sector given its consistent “track record, high profitability and return ratios”.