 "Sun Pharma's anaemic product pipeline likely to hurt FY16 sales")
Sun Pharmaceutical's medium-term outlook continues to be cloudy as far as its Halol facility is concerned. Last week, the US Food and Drug Administration (FDA) revoked the approval issued in March to group company Sun Pharma Advanced Research Company (SPARC) for its new drug application for Elepsia XR (Levetiracetam extended-release tablets 1,000 mg and 1,500 mg).
SPARC’s approval was revoked because of compliance issues at the Halol facility. Sun Pharma has been struggling to maintain supplies after its Halol plant had troubles with the FDA.
Sun Pharma has been at the fore of earnings downgrades. The withdrawal of approval by the FDA for Elepsia must be seen in this light. Sun Pharma could not meet its 13 per cent revenue forecast in FY15. Sales to the US grew 11 per cent to $488 million and analysts expect US exports to keep a quarterly run rate of $125 million.
The Street is viewing this as a big negative.
Sun's pipeline of new launches continues to be weak over the medium term. The launch of Gleevec in February will be crucial for the company as the Street is estimating sales of $250 to 300 million in the first year of the launch. But, some believe the approval for Gleevec may be delayed due to the same reasons that Elepsia ran into trouble.
According to brokerage Spark Capital, increasing instances of FDA action against captive active pharmaceutical ingredient (API) sources have led to delays in approvals of several key abbreviated new drug applications (ANDAs) and loss of launch opportunities for formulations’ firms. This should prompt formulation firms to reference more than one API source in their ANDAs, translating to opportunities for smaller API firms.
Till the time Sun Pharma resolves the Halol issues, its plans to launch products will take a hit. Angel Broking says once the facilities are approved, the company will be able to launch the product.
