Sun Pharmaceutical Industries Ltd. reported strong performance for the first quarter ending June 30, 2007.

Highlights of Q1 consolidated financials

• Net sales increased 23% to Rs.6275 million, from Rs 5112 million in Q1 FY07

• US generic sales grew at 43% in USD terms and 30% in INR terms

• EBITDA margin at 34%

• Net profit is at Rs.2272 million, which is an increase of 29% over Q1 last year. Net margin is 36% as against 35% for the first quarter last year.

These results were taken on record by the Board of Directors at a meeting held in Mumbai today.

According to Dilip Shanghvi, Chairman and Managing Director of the Company, “With the listing of the innovative research company SPARC Ltd. and the demerger now complete, we continue as a strong generic company with a clear speciality and technology focus across current and new markets. Despite significant appreciation of INR against the USD, we’ve shown strong  performance this quarter delivering robust growth and operating profitability.

This resilience and our strong generic pipeline across markets, is the reason we view the increasingly competitive pharma markets as an opportunity, and not a threat. In addition to our rapid organic growth, the proposed capital raising is to build up a war chest to tap into consolidation opportunities.”

Domestic formulations - Consistent growth

Domestic formulations at Rs. 3669 million registered a growth of 26% over the first quarter last year, contributing 56% of total sales. In an increasingly competitive marketplace, Sun Pharma now holds 3.3% market share, as per latest IMS ORG report.

9 key products were launched during this quarter.

US Generics

Caraco recently announced Q1 sales of USD 35 million, up 43% from USD 25 million for Q1 FY07. In INR terms, this growth in net sales is 30%. Caraco recorded a net income of USD 8.5 million for Q1 this year, up 70% from the same quarter last year in a competitive market.

At the end of the first quarter, 83 ANDAs await USFDA approval including 8 tentative approvals; 5 from Sun and 3 from Caraco. These 83 ANDAs correspond to 72 products.

Research

Consolidated R&D expense for the quarter is Rs 608 million. This translates into 9.9% of net sales, the costs of innovative R&D have been booked in the new company. A cumulative of 91 DMF / CEP applications made with 43 approvals so far. The total number of patents applications submitted now stands at 414 with 72 patents granted.

Proposed capital raising and others

The company proposes to raise Rs.35,000 million for future acquisitions in the international generics market. Performance of businesses acquired, including Alkaloida and the manufacturing facility in New Jersey, US, has been progressing satisfactorily and according to plan.

Update on Taro acquisition

Taro Pharmaceutical Industries Ltd. (Taro, Pink Sheets: TAROF) today announced that it will reschedule its shareholder meetings, originally scheduled for July 23, 2007 in Tel Aviv, Israel to September 25, 2007, in order to allow shareholders additional time to fully consider the proposed transaction with Sun Pharma.

Taro said it is taking this step primarily out of concern that public statements made by some large institutional Taro shareholders and their representatives, and the numerous court motions filed by them – all of which were rejected on July 20, 2007 by the Tel Aviv District Court – may have caused confusion among shareholders. In addition to the Tel Aviv District Court’s rejection of all of their motions, including the motion to temporarily enjoin the shareholders meeting to approve the merger with Sun, Israel's Supreme Court today also rejected their request on appeal for an injunction to prevent the shareholders meeting.

In addition, Sun has informed Taro that it will exercise 3,000,000 previously issued warrants it holds, to purchase 3,000,000 shares of Taro at an exercise price of USD 6.00 per share, for an aggregate of USD 18 million in cash. This will provide additional liquidity for Taro and will be used for general corporate purposes. Sun has also agreed to release Taro from its non-solicitation obligations included in the Merger Agreement. 

Sourced From: Sun Pharmaceutical Industries Ltd