Sun Pharmaceutical Industries is an Indian Pharmaceutical that manufactures and sells pharmaceutical formulations, Active Pharmaceutical Ingredient (API) incorporated in 1983. The company provides formulations in various therapeutic areas such as Cardiology, Neurology, diabetology, psychiatry and gastroenterology. They also provide APIs such as Etodolac, Warfarin, carbamazepine and clorazepate also anticancer, steroids, peptides, sex hormones, and the controlled substance. The company is 5th largest in Speciality Generic Company. Sun Pharmaceutical is the largest pharmaceutical company in India.
Financial for the year 2017-18
- Revenue increased by 4.1% on YoY basis it stood at Rs. 6846 crores. The slowdown in the revenue growth in this quarter was due to the decline in its domestic and in the US base revenue. Revenue in Formulation business in India was Rs. 1,860 crores, in the US, was USD 23,979mn, Emerging Markets was USD 13,720mn and Rest of the world accounted to USD 7615mn. Revenue in Bulk was USD 4263mn and another segment was USD 291mn. The US finished dosage revenue was at USD 721 million up by 11% YoY.
- The Sales of branded formulations in India in this quarter was Rs. 1,860 crores, degrowth of 16% YoY I was driven by planned one-time inventory reduction in the supply chain and also due to higher base in Q2FY19. Its Branded Generic Sales was USD 1,480 million.
- EBITDA increased by 11.3% at Rs. 1,531.21 crores as compared to Rs. 1,375.6 crores in the previous year. EBITDA Margins improved by 139bps YoY at 22.1% Vs 22.2% in September 2017.
- Adjusted Net Profit in this quarter amounted to Rs. 996 crores in this quarter i.e. 14.5% of profit margin, out of which Net loss in this quarter was Rs. 218.8 crores it was due to the provision of Rs. 1,214 crores estimated settlement amount to be provided to all the remaining plaintiffs on account of Modafinil, an Anti-trust litigation in the US. One time exceptional cost was Rs. 1, 2144.4 crores which include USD 150.5 million settlement amount for an antitrust litigation for the drug modafinil
- The R&D expenses stood at Rs. 452.3 crores as compared to Rs. 510.6 crores in the previous year. R&D as a percent to sales was 6.6% vs. 7.7% YoY.
- The company’s net cash flow from operating activities was Rs. 3,900 crores. Free cash flow amounts to Rs 2000 crores
- Gross Margins stood at 71.5% vs 73.1% in Q1FY 18.
- Debt/ Equity ratio of the company in Q2FY19 was 0.26x as compared to 0.22x previous year.
- The company has filled 566 ANDA on cumulative basis out of this 432 ANDA got approval from USFDA in the therapeutic area.
- Sun Pharmaceuticals received USFDA approval for CEQUA drug and Xepros drug in this quarter.
- The company’s revenue CAGR for the past 10 years is 20%.
- In H1FY19 the company has launched ILUMYA and YONSA drugs in the US, YONSA is a novel formulation drug in combination with methylprednisolone, and it is a treatment of patients with metastatic castration-resistant prostate cancer. ILUMYA is a biological drug for the treatment to serve plaque psoriasis. This drug is delivered subcutaneously via injection.
- Tildrakizumab (ILUMYA) drugs milestone payment of the drug from Merck of the US; it has been capitalized as a part of Intangibles in the Balance sheet.
- The company took USD 300 million for both the new launches i.e. CEQUA and ILUMYA.
- The company aims to improve its ROCE in future.
- InSite- to be filed in next year, clinical trials is ongoing.
- The company aims to take out some of the drugs from its pipeline due to its unattractiveness of the drug which results indenting the revenue and profits.
- They will be investing in R&D further to build on speciality pipeline strong. Approximately around
- 8%-9% of the revenue is expected to be invested in R&D.
The company reported sluggish quarterly results; it was mainly due to the unexpected net loss to pay the settlement amount of Rs. 1,217 crores to the remaining plaintiffs in an anti-trust litigation for the sleep disorder drug Modafinil in the US.