Sun Pharma to gain from J&J gap in US

Company to gain from supplying alternative cancer drug, as J&J couldn't do so on time

The largest Indian pharmaceutical company by value - Sun Pharmaceutical Industries Ltd -- is all set to gain better revenue from the US markets through sale of an alternative for cancer drug Doxil, as the innovator company Johnson & Johnson was unable to supply the products in time in the US.

 

The drug is used for the treatment of ovarian cancer. 

 

Following J&J's announcement, Sun Pharma shares touched a 52-week high of Rs 586.8 on BSE on Thursday and closed at Rs 583.5, up by 2.8%.
 

Janssen Pharmaceuticals Inc, a unit of Johnson & Johnson, said the cancer drug - Doxil-- was likely to be in short supply in the coming weeks in the US market.

 

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

 

In February 2012, the US FDA had entered into a limited period arrangement with Sun Pharma for the supply of Lipodox (doxorubicin hydrochloride liposome injection) as an alternative treatment to Doxil. In February, Sun Pharma received a generic approval for the same.

 

Sarabjit Kour Nangra, VP-Research, Pharma at Angel Broking, said, “ There is likely to be shortage of Doxil around mid October 2013. Additionally, J&J has not estimated any time line about availability of the drug."

 

Doxil has sales of $ 300 million in the US.

 

Nangra added, "The product is expected to have contributed around  $120-130 million in 2012 for Sun pharma and hence is a key player in the market along with J&J. Thus, any disruption on back of the same, would add significantly to Sun's revenue. While it’s difficult to time the resumption of the supplies from J&J, for the full year - FY2014, the product can increase the net profit of Sun's full year net profit by 8.4%."