Sun Pharma’s Q3 2010 profits drops due to lower sales in US

Sun Pharmaceutical and Industries, the fourth largest generic maker India, has posted a 17% drop in the consolidated profits in the third quarter for the financial year 2010 compared to the similar period a year ago, owing to lower sales volumed in US market.

Sun Pharma’ consolidated revenues went down by 17.1 per cent to Rs 338.95 crore from Rs 408.64 crore last year even though the company’s consolidated net sales increased by 11.2 per cent during third quarter to Rs 1,020 crore from Rs 918.27 crore in the corresponding period of last year.

Sun’s earnings per share dipped to Rs 16.4 from Rs 19.7 period in the last period.

For the nine months period ended December 2009, Sun Pharma’s consolidated net profit declined sharply by 32.8 per cent to Rs 956.60 crore from Rs 1422.85 crore in the similar period of last year. Its EBDITA also moved down to Rs 1047 crore from Rs 1547 crore, a de-growth of 32.4 per cent. Its consolidated net sales declined by 4.6 per cent to Rs 2,994 crore from Rs 3,138 crore as its India branded generic sales remained flat at Rs 1,317 crore and Caraco’s sales declined by 38 per cent to US$ 178 million.

However, its APIs sales improved by 30 per cent during the period under review. Operating margin went down to 28 per cent from Rs 45 per cent Caraco achieved sales of US$ 178 million and net loss of US$ 6 million.

Sales of branded prescription formulations market in India wherein Sun Pharma holds 3.6 per cent market share, as per latest IMS ORG report, improved by 24 per cent to Rs 533 crore, contributing to over half of total sales.

Sun Pharma launched 17 key products, taking the total to 38 during this year.

“All segments of our business, except US generics, have shown a reasonable level of growth in this quarter. On the US generic front, Caraco is taking important steps in its journey to regain manufacturing compliance. With the focus around the globe on improving generic consumption share, we believe the opportunity for a business like ours remains quite significant,” stated Dilip Shanghvi, chairman and managing director Sun Pharma.

Consolidated R&D expenditure reached at 51 crore during the quarter under review and the same worked out 5 per cent of its net sales.

Caraco, the US subsidiary, reported lower sales of US$ 52 million during the quarter ended December 2009, a fall of 7 per cent. Caraco recorded a net loss of US$ 3 million.

Sun Pharma and Caraco received approval for 83 ANDAS. In the third quarter, they filed four ANDAs and awaiting approval for 108 ANDAs from US FDA. This pipeline is expected to build revenues for its US generic business in the years ahead.

Sun has filed a cumulative of 148 DMF/CEP applications with 84 approved so far.

Sun Pharma posted an 11.5% drop in net profit in July-September 2009, as well largely owing to fall in sales in its US subsidiary Caraco Pharma following seizure of products by US FDA.

Sun Pharma’s profits dropped to 4.54 billion rupees ($96 million) in its fiscal second quarter from 5.13 billion last year.

Sun Pharma’s net sales were 11.85 billion rupees, more or less similar to the figure 11.78 billion a year earlier.

US FDA seized all medicines made by Sun Pharma’s US subsidiary Caraco’s facilities in Detroit  after regulatory  officials found there had been repeated violations of manufacturing standards, in June.

Caraco signed a consent decree with the U.S. Food and Drug Administration in September, under which it cannot resume manufacturing until it gets a written notification from independent experts and the agency to do so.

Caraco’s sales in the September quarter fell 36 percent to $78.4 million following FDA action and the cessation of manufacturing.

Headquartered in Mumbai, India, Sun Pharma manufactures and markets a large basket of pharmaceutical formulations as branded generics as well as generics in India, US and several other markets across the world.

In India, Sun Pharma leads in niche therapy areas of psychiatry, neurology, cardiology,
diabetology, gastroenterology, and orthopedics.

Sun Pharma has skills in product development, process chemistry,and manufacturing of complex API, as well as dosage forms.