Sun Pharma’s operating profit margin improved by 1.9 per cent to 45.7 per cent in the September quarter, thanks to the strong performance by its subsidiary Taro Pharma. The good showing was despite higher integration and compliance costs pertaining to Ranbaxy acquisition.
Taro posted a strong 22 per cent growth in revenue for the quarter. Its operating profit margin vaulted to 65.5 per cent in September 2014, from 60.6 per cent during the same period last year. This was helped by upward revision in the prices of select drugs in the US. This more than compensated for the marginal decline in volumes. The benefit from higher drug prices should continue in the December quarter too. Taro has filed for five products so far this year and has received approval for three products.
Strong performance by Taro more than compensated for the weakness in Sun’s US business due to expiry of exclusivity for Novo Nordisk’s anti-diabetes drug Prandin and lower sales of former’s anti-cancer drug Doxil.
But Sun achieved 22 per cent revenue growth in the domestic market, thanks to the launch of six new products coupled with strong brand recall in therapies such as neurology, diabetes and cardiology. The pharma industry grew 11 per cent during this period, according to data compiled by market research firm AIOCD AWACS.
Sun, in September, obtained global marketing rights for Merck Inc’s innovative psoriasis drug tildrakizumab, which is currently undergoing phase III trials. In addition to the upfront payment of $80 million, Sun is expected to spend around $250 million over the next five years towards development and safety trials.
Meanwhile, Sun’s and Taro’s combined portfolio of about 160 products which are pending approval in the US is expected to drive growth.