Sun Pharma profit doubles on sales growth, licensing income

Net profit rises to Rs 2,235 crore in Q2 FY 17 as against Rs 1,028 crore in same period last year

Strong sales growth in the  key US  market and  product licensing income helped Sun Pharmaceutical Industries double its consolidated net profit in the September quarter, year on year.

Net profit grew to Rs 2,235 crore, from Rs 1,028 crore in the same period last year. Total revenue was higher by 20% at Rs 8,265 crore.  

Bloomberg had estimated Rs 1,624 crore net profit; the actual result is 37% higher.

Sun has announced it would be merging four of its domestic subsidiaries into the parent company, for better economies of scale and other benefits. This is subject to court and other regulatory approval.

The quarterly profit was helped by strong revenue growth in the US due to sales of anti-leukaemia drug Gleevec. The company has a 180-day exclusivity in sale of the generic version and this resulted in US sales growth of nine per cent. And, 

Taro Pharma, its US subsidiary, reported 8% sales growth. 

The US businesses has been facing pricing pressure and supply constraints due to regulator-mandated remediation measures. It accounts for nearly half its revenue. The domestic business accounts for nearly a quarter and grew 11 per cent over a year.
 

Other operating income rose to Rs 501 crore. This  included Rs 300 crore from drug firm Almirall for licensing of Tildrakizumab, an  under-development psoriasis drug.

“Synergies from the Ranbaxy acquisition are gaining momentum and we are on track to achieve the targeted benefits. These will continue to help in funding our emerging specialty businesses. Post the close of the quarter, we further strengthened our branded ophthalmic pipeline through the acquisition of Ocular Technologies. We were also very happy to announce the detailed results for Tildrakizumab Phase-3 trials, which validate the potential of this product for psoriasis treatment,” stated Dlip Shanghvi, managing director.

Its Halol Plant in Gujarat remains under a Warning Letter from Food and Drug Administration (FDA). The company has requested USFDA for inspection to get the requisite clearance. This will be crucial to US growth of the company. Though the company has achieved 18 per cent growth in sales during first half of FY17, it has not increased its guidance of 8-10 per cent sales growth for FY17. This indicates pricing pressure the company is anticipating primarily in the US, say analysts.

Its Halol Plant in Gujarat remains under a Warning Letter from Food and Drug Administration (FDA). The company has requested USFDA for inspection to get the requisite clearance. This will be crucial to US growth of the company. Though the company has achieved 18 per cent growth in sales during first half of FY17, it has not increased its guidance of 8-10 per cent sales growth for FY17. This indicates pricing pressure the company is anticipating primarily in the US, say analysts.