Sun Pharma’s hair loss drug Leqselvi's launch remains in limbo

Sun Pharma released its Q2 earnings on October 28.

The launch timeline of Sun Pharma's specialty drug Leqselvi (deuruxolitinib) remains in a muddle as it continues to remain embroiled in a patent dispute. The drug, used for curing alopecia areata that causes hair loss, was slapped with an patent dispute just a week after it received an approval from the US Food and Drug Administration.

The drug, which was projected to generate around $200 million in sales over the next three to four years for Sun Pharma, was slated for a launch in July-August as per reports. However, US-based pharma company Incyte filed a preliminary injunction alleging patent infringement, creating a significant roadblock for Leqselvi’s rollout.

Not commenting on the any probable timeline for Leqselvi's launch, the management, in its Q2 earnings call stated that it was ready to launch the drug within a couple of weeks if it receives a favourable judgment.

In the worst-case scenario, if the judgment is unfavorable, Sun Pharma would be unable to launch the product until the patent expires, effectively delaying its entry into the market. However, the scope for any royalties tied to Leqselvi would be contingent on a settlement, which can only be clarified once the judgment is passed, the management stated.

"The launch of Leqselvi is contingent on a favourable judgment or settlement fee. We note that a costly or delayed settlement can lead to a drop in Leqselvi’s net present value (NPV)," Nuvama Institutional Equities highlighted in a note.

Uncertainty over Leqselvi's launch had irked brokerages in the previous quarters as well, prompting many to lower their estimates for Sun Pharma to account for the delayed rollout.

Despite the setback with Leqselvi, Sun Pharma delivered strong earnings for the July-September quarter. The drugmaker's net profit surged 28 percent on-year to Rs 3,040 crore, surpassing analyst expectations. A Moneycontrol poll of 10 brokerages had pegged the July-September net profit at Rs 2,911 crore, attributing the outperformance to strong seasonality and robust growth in the specialty segment.

Sun Pharma’s consolidated revenue from operations also rose 9 percent year-on-year to Rs 13,291 crore, driven by double-digit growth across key markets, especially in the US, coming close to the poll estimate of Rs 13,299 crore.

Also Read | Sun Pharma’s Q2 net profit jumps 28% on-year to Rs 3,040 crore, beats expectations

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