Sun Pharma's Q4 profit falls 37% on one-time expenditure

Headline results for the fourth quarter:

Revenue INR 80.8 billion ($1.1 billion) +15
Profit INR 4 billion ($53 million) -37%

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

What the company said:

Sun Pharmaceutical managing director Dilip Shanghvi said that during the quarter, "we have done well and have started gaining market share in India," noting that "our global specialty business has also gained reasonable traction with Ilumya, recording approximately $94-million sales globally in the first full-year of commercialisation."

However, Sun Pharma's profit in the quarter was hit by a one-time expenditure of INR 2.6 billion ($34 million). The company also made provision for INR 1.6 billion ($21 million) for a settlement with the US Department of Justice to resolve sales, marketing and promotion issues regarding Levulan and Blu-u products.

Meanwhile, Shanghvi indicated that Sun Pharma was "able to maintain business continuity [during the COVID-19 pandemic], so that patients continue to get access to their much-needed medications."

Other results:

  • US finished dosage sales (including Taro): $375 million, down 15%, with Sun Pharma noting that fourth-quarter division sales last year included a one-time contribution from the US special business, "and hence the numbers are not strictly comparable"
  • Taro Pharmaceutical sales: $175 million, down 3%, with Taro CEO Uday Baldota saying that despite the "market position of many of our products, we continue to face a challenging US generic market"
  • India sales: INR 23.7 billion ($312 million), Sun Pharma said that when adjusted for a one-time impact of approximately INR 10.9 billion ($144 million) related to a change in distribution for the India business in last year's fourth quarter, the division recorded year-on-year growth of 8%
  • Emerging markets sales: $187 million, up 8%
  • Rest of world sales: $155 million, up 1%, while full-year growth of 29% to $638 million was partly driven by consolidation of the Pola Pharma acquisition in Japan
  • Active pharmaceutical ingredient (API) sales: INR 4.8 billion ($63 million), unchanged from the same time last year
  • Full-year revenue: INR 323.3 billion ($4.3 billion), up 13% from the year before
  • Full-year profit: INR 37.7 billion ($497 million), up 41% from the year before

Looking ahead:

Sun Pharma stated that "despite our proactive COVID-19 risk response initiative, we do estimate some softening of sales in the near term due to the lockdown and stocking up by customers, although it is difficult to quantify the impact as of now."

To read more Top Story articles, click here.