Sun Pharma swings to profit in second quarter as sales rise 16%

Headline results for the second quarter:

Revenue

INR 79.5 billion ($1.1 billion)

+16%

Profit

INR 1.1 billion ($155 million)

Versus loss of INR 270 million ($38 million)

Note: All changes are versus the prior-year period unless otherwise stated

What the company said:

"Our soft second-quarter performance does not reflect the actual health of the underlying business," remarked managing director Dilip Shanghvi, noting that results for the quarter, as well as the first half of the fiscal year, point to "sustained growth momentum and is in-line with our full-year guidance." He added "we continue to focus on cost savings and efficiency improvement to align our generic business with the changing industry dynamics." 

Shanghvi also highlighted the recent launch of eye-disease drug Cequa in the US, while the plaque psoriasis treatment Ilumya "continues to gain traction... We are excited about the [drug's] long-term prospects."

Meanwhile, the executive indicated that the company is continuing efforts to control costs and improve efficiencies, steps that are "necessary to ensure that we continue to earn reasonable returns in the current competitive state of the US generics market." 

Other results:

  • US finished dosage sales: $339 million, flat versus the prior year, with revenues here accounting for 30% of total consolidated sales
  • Taro Pharmaceutical sales: $161 million, up 1%
  • India sales: INR 25.2 billion ($355 million), up 35%, branded formulation sales in India were down 16% to INR 18.6 billion ($261.8 million), largely due to a planned one-time inventory reduction in the supply chain
  • Emerging markets sales: $201 million, up 3%, with Eastern Europe, including Romania, Brazil, Mexico and Latin America being key markets that contributed to growth, although currency depreciations in several countries impacted gains
  • Rest of world sales: $161 million, up 49%
  • Active pharmaceutical ingredient (API) sales: INR 4.7 billion ($66 million), up 10%, benefitting from vertical integration of the formulations business, with the company "[continuing] to increase the API supply for captive consumption for key products"

Looking ahead: 

Shanghvi stated that following the clearance of Sun Pharma's Halol facility by the FDA last year, "we have started receiving approvals from Halol for the US…[and] expect a gradual increase in new approvals" from the Indian site. 

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