Sun Pharma profit beats estimates
India's biggest drugmaker Sun Pharmaceutical Industries Ltd recovered from a surprise quarterly loss last year and swung back into profit as the US, its largest overseas market, started reopening after curbing its Covid-19 outbreak.
The firm headed by billionaire Dilip Shanghvi posted a net income of Rs 1,440 crore ($193.7 million) for the quarter ended June 30 compared to an average profit estimate of Rs 1,413 crore based on a Bloomberg survey of analysts. Revenue rose 28 per cent to Rs 9,720 crore, according to an exchange filing on Friday. It also took a much smaller onetime charge of Rs 631 crore in the latest quarter.
The resilience of Sun's earnings despite the company not having produced any Covid-related treatments during the pandemic reflects its bet on specialty drugs in the US paying off. The Mumbaibased company has a portfolio spanning dermatology, ophthalmology and oncology in its top market outside India.
As the US struggled to contain its coronavirus outbreak earlier this year, India was hit by a deadly second wave in March. Last month, Sun said it was collaborating with a number of others on a clinical trial in India of the anti-viral drug molnupiravir for the treatment of mild Covid.
While the drugmaker hasn't covered the coronavirus treatment market, their "outperformance through Covid and supply disruption is testimony to Sun's brand equity and distribution muscle in the market," Alliance-Bernstein analysts Nithya Balasubramanian and Praveen Shreenivas wrote in a report last week. "In the short-term we expect growth will be aided by post-Covid demand recovery especially in acute therapies where Sun has meaningful exposure."
However, Sun's earnings have been hit recently with multiple legal charges in the US and Europe. The firm took a one-time charge related to antitrust probes in the previous quarter. Last year, it reported a surprise first quarter loss as it set aside nearly $480 million to settle drug price-fixing allegations in the US.
The company also resolved a patent litigation with Bristol Myers Squibb unit Celgene Corp in June, which gave Sun a licence to manufacture and sell a limited quantity of the generic cancer drug lenalidomide in the US after March 2022.
The Sun Pharma stock soared 10.06 per cent to Rs 774 on the BSE.