Specialty portfolio boosts Sun Pharma net profits in Q3FY23

India’s largest and most valuable pharma company, Sun Pharmaceutical Industries Ltd, reported 5.2% higher net profits for Q3FY23 at Rs2,166 crore on yoy basis. The big trigger for the quarter came from an uptick in the specialty portfolio with the Indian and US markets being the key drivers. Top line sales of Sun Pharma were up 13.1% at Rs11,100 crore in Q3FY23.

Sun Pharma underlined its strong India franchise as the India formulation sales grew 7.1% at Rs3,391 crore in Q3FY23. Even the US formulation sales were up 6.3% at $422 million. For Sun Pharma, the India formulations sales and the US sales account for about 31% each of the overall revenues. But the bigger story was in specialty sales, a key driver of profit growth in Q3FY23.

For December 2022 quarter, global specialty sales grew 21.6% at $235 million; including a milestone payment of $12.5 million. Overall formulations sales in emerging markets (ex-India) grew 7.7% yoy at $257 million for the quarter. The Rest of the World (ROW) portfolio grew 4.8% yoy at $189 million. Sun Pharma’s US based subsidiary (Taro) reported flat revenues at $139 million.

Sun Pharma Founder and Managing Director, Dilip Shanghvi, underlined that specialty was expected to continue as a key growth driver for the company. Apart from organic investments made towards expansion, Sun Pharma has also adopted an inorganic strategy, which includes the recent acquisition of Concert Pharma, the deuruxolitinib specialist, a high end and sought after dermatological product. Sun specialty portfolio is largely dermatological.

Sun Pharma recently got an import alert (from USFDA) for its Halol plant, which has negatively impacted its generics business in the US. Sun will be filing a new drug application with USFDA for Concert Pharma’s deuruxolitinib. For Q3FY23, active pharma ingredients (API) sales were up 9.4% at Rs515 crore. R&D spend in Q3FY23 was Rs670 crore; or 6.04% of sales.