No timeline for resuming supply from Mohali plant: Sun Pharma

Sun Pharmaceutical Industries Ltd reported a 1.9 percent year-on-year (YoY) fall in its consolidated net profit at Rs 2,022.5 crore for the April-June quarter

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Drugmaker Sun Pharmaceuticals has not resumed supply from its Mohali plant, said company executives during the earnings call on August 3.

Further, the company clarified that it doesn’t need any inspection to restart supply from the plant. The company did not give a timeline on when the Mohali or the Halol facility will be ready inspection and the supply will restart.

In April, the Mohali plant had received a letter titled “Consent Decree Correspondence/Non-Compliance Letter" from the United States Food and Drug Administration (USFDA). The USFDA directed the company to take corrective actions at the Mohali facility before releasing further final product batches into the US.

Sun Pharma inherited the Mohali plant from Ranbaxy as a part of the merger in 2015. The plant supplied $100-150 million worth of products to the US. Major products manufactured in the plant include colon drug Pentasa, Protonix oral suspension (treats conditions that cause too much stomach acid, like heartburn and stomach ulcers) and Ranolazine (treats heart related chest pain).

The management also said that the subdued growth quarter due to the the national list of essential medicines (NLEM) impact. The full impact of NLEM (which was announced in Dec-Jan period), is visible in the Apr-Jun quarter.  The company expects NLEM impact to subside in next 2 quarters said chief financial officer (CFO) CS Muralidharan to CNBC-TV18 in an interview on August 4.

The NLEM is a list released by the Ministry of Health and Family Welfare. The medicines listed in the NLEM are sold below a price ceiling fixed by the National Pharmaceutical Pricing Authority (NPPA). India formulation sales accounted for about 30 percent of total consolidated sales in the quarter. US accounted for over 33 percent of total consolidated sales.

The filing of Abbreviated New Drug Applications (ANDAs) moderated this quarter because of the ransomware attack (which happened in March) and this is expected to return to normal in the next quarters.

Also read: Sun Pharma Q1 results: Net profit down 1.9% to Rs 2,022.5 crore, lags estimate
Regarding the acquisition of Taro, the management didn’t reveal any updates on timeline. However, they said Taro operates in a segment which faces increasing competitive pressure–dermatology. It is hard for Taro to face the competition in this segment as an independent company. This was the primary reason cited for the pending acquisition of Taro by Sun Pharma.

Taro reported sales of US$ 159 million, in the quarter under review, up by 1.4 percent YoY and net profit of about US$ 10 million, lower by 28.9 percent over net profit of Q1 last year.

Muralidharan also said that the sales in US did well on account of speciality business doing well & Revlimid sales.

The management also spoke the product pipeline and that it is accelerating the pace of the phase-3 trial of Ilumya used to treat psoriatic arthritis. Another product in pipeline GL0034 was found to reduce body weight with a single dose in obese individuals without diabetes. The phase-1 trial of the drug has been completed.

The company also had a sequential decline in speciality biz due to seasonality in levulan (used to treat actinic keratosis), Muralidharan added.

Also read: Brokerages positive on Sun Pharma's growth but investors unimpressed

Sun Pharmaceutical Industries Ltd reported a 1.9 percent year-on-year (YoY) fall in its consolidated net profit at Rs 2,022.5 crore for the April-June quarter on August 3. The drugmaker's net profit lagged Moneycontrol's estimate of Rs 2,119.4 crore. This was due to a one-time exceptional loss of Rs 322.87 crore. Excluding the exceptional loss, the net profit came around Rs 2,345.4 crore, up 13.8 percent year-on-year.