By Kashish Tandon
July 31 (Reuters) – India’s Sun Pharmaceutical Industries reported a 27% rise in first-quarter profit on Friday, driven by robust growth in its high-margin specialty medicines business as the country’s largest drugmaker continues to pivot beyond traditional generic drugs.
The results reflect Sun Pharma’s push to expand its specialty medicines business, helping offset persistent pricing pressure in the U.S. generics market.
That portfolio, commanding higher margins, includes treatments for skin disorders, cancer and other chronic diseases.
Specialty sales rose 12.8% to $351 million, accounting for 21.9% of total revenue. Growth was driven by a 16% rise in India, its biggest market, while U.S. sales were broadly flat.
“Sun’s India business has been the major growth driver this quarter, with growth driven by new launches in the specialty segment,” said Vishal Manchanda, a pharma analyst with Systematix Institutional Equities.
“Sun is one of the companies in India which is the first to bring a new product to the market and that gives them an edge in setting the pricing as well,” Manchanda said.
Sun has also been expanding overseas through acquisitions, including its planned $11.75 billion purchase of Organon, which would be the largest cross-border deal by an Indian drugmaker.
Consolidated net profit rose to 28.95 billion rupees ($303.5 million) in the quarter ended June 30 from 22.79 billion rupees a year earlier, while revenue increased 10.5% to 153 billion rupees. Analysts had expected a profit of 29.90 billion rupees, according to LSEG data.
The company took a one-time charge of 2 billion rupees during the quarter related to the Organon acquisition.
Like its peers, Sun Pharma is also targeting India’s fast-growing obesity and diabetes market with generic versions of semaglutide, the active ingredient in Novo Nordisk’s blockbuster drugs Wegovy and Ozempic.
($1 = 95.3750 Indian rupees)
(Reporting by Kashish Tandon in Bengaluru; Editing by Subhranshu Sahu and Niveidta Bhattacharjee)
Comments