Sun Pharma Reports Q3FY19 Financial Results

Sun Pharmaceutical Industries Ltd. reported financials for the third quarter & nine month ending December 31st, 2018. Highlights of Q3FY19 consolidated financials:

• Sales/Income from operations at Rs. 7657 crores, growth of 16 percent over same quarter last year.
• India sales at Rs. 2235 crores, growth of 7 percent.
• US finished dosage sales at USD 362 million up by 10 percent over Q3 last year.
• Emerging Markets sales at USD 203 million, growth of 7 percent over Q3 last year.
• Rest of World sales at USD 125 million, growth of 4 percent over Q3 last year.
• R&D investments at Rs. 465 crores (6.1 percent of sales) compared to Rs. 473 crores (7.2 percent of sales) for Q3FY18.
• EBITDA at Rs. 2069 crores grew by 48 percent with resulting EBITDA margin of 27 percent. Margins were partly driven by forex gains.
• Net profit for Q3FY19 was at Rs. 1242 crores with resulting net profit margin at 16.2 percent. Net profit for Q3 last year was adversely impacted by one-time deferred tax adjustment of Rs. 513 crores related to changes in US tax rates. Adjusted for this, net profit growth for Q3FY19 was 49 percent YoY.

Highlights of 9m FY19 consolidated financials:

• Sales/Income from operations at Rs. 21,642 crores, growth of 12 percent over same period last year.
• India sales at Rs. 6247 crores, up by 3 percent over 9m last year.
• US finished dosage sales at USD 1083 million up by 10 percent over 9 months last year.
• Emerging Markets sales at USD 594 million up by 8 percent over 9 months last year.
• Rest of World sales at USD 340 million, de-growth of 2 percent over 9 months last year.
• EBITDA at Rs. 5031 crores, resulting EBITDA margin of 23 percent.
• Reported net profit for 9m FY19 was at Rs. 2,029 crores versus Rs. 753 crores for 9 months last year. Excluding the one-time impact of Modafinil antitrust litigation in the US and the deferred tax adjustment stated above, the adjusted net profit for 9m FY19 was at Rs. 3244 crores, up by 46 percent YoY, with adjusted net profit margin at 15 percent.

These results were taken on record by the Board of Directors at a meeting held in Mumbai. Dilip Shanghvi, Managing Director of the Company said, “Our focus on execution is reflected in the Q3 performance. We remain committed towards executing our global specialty strategy, strengthening our core operations and enhancing our overall efficiencies. The Ilumya launch in US has been well received by doctors. We recently commercialized Xelpros in the US and are preparing to launch Cequa in the coming months.”

India Business – Market Leadership

Sale of branded formulations in India for Q3FY19 was Rs. 2235 crores, up by 7 percent and accounting for 29 percent of total sales. For the nine months, sales were at 6247 crores, up by 3 percent over same period last year. Sun Pharma is ranked No. 1 and holds approximately 8.2 percent market share in the over Rs. 129,000 crore Indian pharmaceutical market as per AIOCD AWACS December-2018 report. For Q3FY19, the company launched 20 new products in the Indian market.

US Formulations

Sales in the US were USD 362 million for the quarter, a growth of 10 percent over same period last year and accounted for 34 percent of total sales. For nine-month period, sales were USD 1083 million recording a growth of 10 percent over same period last year. At the same time, Taro posted Q3FY19 sales of USD 176 million, up 13 percent over Q3 last year. For the nine months, sales were USD 490 million, marginally up over nine-month last year. Taro’s net profit for Q3 was USD 93 million while for the nine-month period, it reported a net profit of USD 223 million.

Emerging Markets

Our sales in emerging markets were at USD 203 million for Q3; up 7 percent over same quarter last year and accounted for 19 percent of total sales. For the nine months, sales were USD 594 million, up by 8 percent over the nine-month period last year.

Rest of World Markets

Formulation sales in Rest of World (ROW) markets excluding US and Emerging Markets were USD 125 million in Q3FY19, a growth of 4 percent over Q3 last year and accounting for approximately 12 percent of revenues. For the nine months, sales were USD 340 million, down 2 percent over nine-month last year.

Active Pharmaceutical Ingredients (API): Strategic strength

Our API business imparts benefits of vertical integration for our formulations business. We continue to increase the API supply for captive consumption for key products. For Q3FY19, external sales of API were at Rs. 426 crores, up by 15 percent over Q3 last year. For the nine-month, API sales were at Rs. 1247 crores, up by 17 percent over nine-month last year.

Research – Investing for future

Consolidated R&D expense for Q3FY19 was Rs. 465 crores, or 6.1 percent of sales compared to Rs. 473 crores or 7.2 percent of sales for Q3 last year. For the nine-month, R&D expense was Rs. 1417 crores, or 6.5 percent of sales. We have a comprehensive product offering in the US market consisting of approved ANDAs for 441 products while filings for 564 ANDAs await US FDA approval, including 15 tentative approvals. For the quarter, 5 ANDAs were filed and 10 approvals were received. Additionally, the pipeline includes 49 approved NDAs while 6 NDAs await US FDA approval. – Medical Buyer Bureau