Buy Sun Pharma; target of Rs 2400: Emkay Global Financial

Buy

Emkay Global Financial's research report on Sun Pharma

The US Court of Appeals has vacated the preliminary injunction against Sun Pharma’s launch of Leqselvi which was granted by the US District Court of New Jersey in Nov-24. While the decision of the US Court of Appeals now technically clears the way for Sun to launch Leqselvi, we note that the litigation between Incyte and Sun is still under way and a launch prior to the expiry of Incyte’s ‘335 patent (Dec-26) will be an at-risk launch. Sun has stated that it will disclose its launch plans in due course. However, given that our (as well as the street’s) base case is Sun entering a royalty-based settlement with Incyte, the development is a material positive for Sun from a negotiation/potential settlement standpoint.

Outlook

An FY26 launch continues to be our base case, and we have currently factored in US sales of USD40mn/124mn for FY26E/27E from Leqselvi. While Leqselvi’s EPS contribution in FY26E (marginally dilutive)/FY27E (0.5%) is not meaningful, considering the launch-linked costs that we have built in, we expect the Leqselvi opportunity to be as significant as Ilumya is today by FY30 (US + ex-US sales of more than USD500mn, per our estimates). We reiterate BUY.

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Sun Pharma - 11042025 - emkay