Sun Pharmaceutical Industries, India’s largest drug maker by sales on Tuesday posted a net profit decline of 5 percent to Rs.1471.8 crore in the third quarter ended December due to slower growth of sales in US and Indian markets.
The company posted a net profit of Rs.1544.9 crore in the same period previous year. Sun Pharma grew its revenues by 8 percent to Rs.7683 crore in the third quarter.
Sun Pharma’s Q3 net profit and sales came in below analyst expectations. A CNBC-TV18 poll of analysts estimated the net profit to be at Rs 1,804.6 crore and revenues Rs 7,905.3 crore.
On sequential basis the EBITDA margin declined from 34.3 percent in Q2 versus 29 percent in Q3.
The tax expense of the company shot up by 319 percent in the third quarter to Rs 373 crore.
US generics business that accounts for nearly half of Sun Pharma sales grew at a moderate pace of 4 percent USD 507 million in the third quarter.
US sales slowed down despite the benefit of the authorized generic sales of Olmesartan and its combinations.
The company continued to see sales tapering at its US subsidiary Taro Pharmaceuticals and price erosion of its blood cancer generic drug Gleevec due to competition.
Taro posted Q3 FY17 sales of USD 220 million, down 15% over Q3 last year.
India which accounts 26 percent of Sun Pharma's sales grew 5 percent to Rs 1,969 crore. In Q3.
The sales of most Indian companies grew at much slower pace in the third quarter due to impact of demonetisation.
Sun Pharma with approximately 8.7% market share – ranks top in the Indian branded generics market.
Emerging markets sales at USD 172 million up by 14 percent, while Rest of World sales at USD 113 million, growth of 33 percent over Q3 last year.
R&D expenditure was at Rs. 613 crores or 8 percent of sales. Sun Pharma spends a major portion of its R&D expenditure on funding the clinical development of company’s specialty pipeline.
“While we continue to focus on growing our existing business, we are happy to invest our strong cash flows in enhancing our specialty pipeline, though currently
without commensurate revenue streams,” said Dilip Shanghvi, Managing Director of Sun Pharma.
“During the quarter, we commercialized BromSite, our first specialty ophthalmology product in the US. Post the close of the quarter, Ocular Technologies, a company which we had recently acquired, announced positive results for Seciera Phase-3 trials demonstrating a rapid onset of action at 12 weeks of treatment for dry eye disease,” Shanghvi said.
As on December 31, Sun Pharma has ANDAs for 424 products while filings for 149 ANDAs await US FDA approval, including 14 tentative approvals.
For the quarter, the company filed 8 ANDAs and 1 approval was received. Additionally, the pipeline includes 36 approved NDAs while 4 NDAs await US FDA approval, of which 2 NDAs were filed in 9m FY17.
Shares of Sun Pharma declined 0.73 percent to close at Rs.650.15 on BSE, the benchmark Sensex declined 0.04 percent to end 28,339.31 points.