Sun basks in improved US sales
Sun Pharmaceuticals registered a spectacular performance during the December 2007 quarter
By Kiran Kabtta, TNN |
Sun Pharmaceuticals registered a spectacular performance during the December 2007 quarter. At Rs 318 crore, the company reported a 60% jump in net profit against the same quarter of the previous year along with a 49% rise in revenues at Rs 804 crore.
The company’s performance has been attributed to improved sales in the US generics market especially the generic adaptation of Novartis’ epilepsy drug Trileptal. It is the first time ever that the company’s consolidated revenue from its international business at Rs 437 crore has exceeded revenue from its domestic business by Rs 43 crore. Revenues from domestic formulations business posted a 28% growth.
The company’s operating margin soared 28% for the quarter ended December 2006 to 41% this quarter. This is due to the decrease in raw materials and employee cost achieved by the company. For the nine-month period ended December 2007, the company’s total revenue stood at Rs 2,180 crore, an increase of 31%, compared with the same period of the previous year. In view of this, the company has revised its sales growth guidance for the current fiscal to 28-30% over FY07.
Sun Pharma is the market leader in speciality therapy areas of psychiatry, neurology and cardiology. Against an industry average of 33%, Sun pharma generates almost half of its revenues from the domestic market. This, to an increased extent, shelters the company from the appreciating rupee.
Despite pricing pressures, the US subsidiary, Caraco, has clocked a net income of $11 million and registered a 162% jump in topline for the quarter ended December 2007. Between Sun and Caraco, abbreviated new drug applications (ANDAs) are now approved for 46 products compared with 29 at the end of FY07.
Sun has launched the generic of Wyeth’s heartburn pill Protonix in the US this month, a product for which it shares a six-month exclusivity period along with Israel-based Teva Pharmaceuticals. Although the research & development expenses have declined marginally as compared with last year, it is the expenditure of capital nature that has witnessed a drop while the revenue expenditure continued to increase.
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However, the company’s plans to acquire Taro still remains uncertain as the board of the Israeli generic company is yet to meet in the current quarter to consider the merger proposal. The company already has a 25% stake in Taro. Its acquisition will help taro to increase its market share in the North American market, as more than 90% of Taro’s sales come from this region. Kiran Kabtta
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