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Informist, Friday, May 22, 2026

 

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--Sun Pharma: Higher spends in US in Q4 affected margin
--CONTEXT: Sun Pharma mgmt's comments in post-earnings call with analysts
--Sun Pharma: Q4 global innovative sales across US, ex-US markets
--Sun Pharma: US formulation sales down Q4 amid more competition in generics
--Sun Pharma: See high single-digit consol revenue growth in FY27
--Sun Pharma: See R&D spend in FY27 at 6-7% of sales
--Sun Pharma: Co's generics ops sites in India ready 24x7 for US FDA audits
--Sun Pharma: See effective tax rate of around 25% for FY27

 

By Rajesh Gajra and Ashutosh Pati

 

MUMBAI – Sun Pharmaceutical Industries Ltd. has struggled to grow its US generics market in recent quarters partly because the company has not been getting approvals from the US Food and Drug Administration amid compliance issues, a top official said at a post-earnings call with investors and analysts Friday. The "generics business is a business where pricing pressure means existing products will lose top line every year," he said.

 

Sun Pharma is awaiting US FDA approvals for its filings for 122 abbreviated new drug applications, as per the company's investor presentation. "As we start getting new approvals, hopefully we will start seeing some improvement (in volume)," the official said. Sun Pharma's formulation sales in the US declined 1.1% on year to $459 million in the March quarter. The sales were lower in the US generics business because of additional competition in certain products, the management said. 

 

To a question on whether the company expects any reinspection by the US FDA in the financial year 2026-27 (Apr-Mar), a top official said its sites operate on a 24x7 readiness basis but the company "would not be able to predict as to when the FDA would audit our sites". On profitability, where the company saw its earnings before interest, tax, depreciation, and amortisation margin shrink to 27.1% in the March quarter from 28.7% in the year-ago quarter and 31.9% in the trailing quarter, the management said that as far as the sequential decline in margin was concerned, several factors such as lower milestone income, seasonality, and higher spends in certain geographies, including the US, were behind it.

 

Sun Pharma's management gave a guidance of "high single-digit" consolidated revenue growth for FY27. It said this was "based on our current understanding of the regulatory and macro environment". The company expects its spending on research and development for FY27 to be 6-7% of sales.

 

Giving an update on its recent signing of definitive documents for acquisition of Organon, the management said the company has "set up an integration management office and initiated activities for day one preparedness (and) regulatory filings in various markets are in progress".

 

To a question on whether the company has any timeline with respect to the potential launch in European and other non-US markets of specialty products Leqselvi and Unloxcyt that were launched in the US in FY26, the management said it was not "factoring any sales out of this product in any geographies other than the US this year". It clarified that it was not taking a view that the other geographies are not attractive, but said "the filing itself requires a certain time because you have to recognise that these are products that we license from somebody".

 

On the good performance of global innovative medicine sales in the March quarter, the management said this was "driven by growth across the US and ex-US markets". On the likely effective tax rate for FY27, the management said this would be around 25%.

 

Sun Pharma announced its March quarter earnings Friday. The company reported 26% year-on-year growth in consolidated net profit to INR 27.14 billion on the back of 13% growth in revenue from operations to INR 146.12 billion. Its shares closed at INR 1,844.60 on the National Stock Exchange, down 2.5% from Thursday.  End

 

Edited by Rajeev Pai

 

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