Provision for damages payable to Wyeth for launch of generic protonix ahead of legal settlement led Sun Pharma to report a loss of Rs 1,276 crore during the quarter ending June.
The payment is likely to be made in the current quarter. Adjusting for the provision of Rs 2,517 crore, the company’s net profit grew 47 per cent to Rs 1,202 crore.
Sun Pharma’s recent US acquisitions – DUSA and URL Pharma helped revenue growth in the US compensating for the marginal decline in Taro’s revenues.
This helped the 3.7 percentage point improvement in the company’s consolidated gross margins.
The four per cent decline in Taro’s revenues for the quarter was on account of charges on contractual obligations due to price adjustments. This being an aberration, growth may normalise in the subsequent quarters.
The management was cautious about the sustainability of the pace of improvement at DUSA and URL in the forthcoming quarters. Sun launched the generic version of anti-diabetic brand Prandin in early July.
With six month exclusivity on the product, the company is well placed to sustain healthy growth in revenues and profits over the next two quarters.
India formulations growth of 44 per cent was due to lower sales during the same quarter last year.
Adjusting for the base, Sun’s domestic business grew at a slow 11 per cent on account of the new drug pricing policy, strike by dealers in Maharashtra and temporary ban on anti-diabetic drug Pioglitazone.
However, growth in the home market is expected to bounce back beginning this quarter.