Release Date: August 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sun Pharmaceuticals Industries Ltd (BOM:524715, Financial) reported a 6.3% increase in Q1 FY25 sales compared to Q1 FY24, reaching INR125,245 million.
- The company's EBITDA for Q1 FY25 was INR36,076 million, an 8.3% increase over Q1 FY24, with EBITDA margins improving to 28.5%.
- Net profit after tax for Q1 FY25 was INR28,356 million, up 40.2% over the reported net profit of Q1 last year.
- India business saw a robust growth of 16.4% in sales of formulations, accounting for 33.1% of total consolidated sales.
- Sun Pharmaceuticals Industries Ltd (BOM:524715) launched six new products in India during Q1 FY25, contributing to its market leadership.
Negative Points
- The US business experienced a 1% decline in sales over Q1 last year, with the US accounting for 31.1% of consolidated sales.
- Forex loss for the quarter was INR505 million, compared to a gain of INR20 million in the same period last year.
- Other expenses were at 30.9% of sales, higher year-on-year due to increased R&D and selling and distribution expenses.
- The company faces litigation in the US regarding the launch of Leqselvi, which could delay its market entry.
- Formulation revenues in the rest of the world were down by 2.9% over Q1 FY24, accounting for 12.6% of consolidated Q1 revenue.
Q & A Highlights
Q: Sequentially, we have seen some kind of sequential decline in the US business. Is it fair to believe that the entire part of the slippage sequentially is led by the seasonality factor in Levulan?
A: The decline in the Specialty side is due to the seasonality of Levulan. Barring Levulan, which declined for seasonal reasons, the Specialty product has shown growth. As for generic Revlimid, the sales for Q1 should be similar to Q4 of the prior year. The sales of this product will always be episodic, making it difficult to estimate regular consistent sales each quarter. - Abhay Gandhi, CEO, North America
Q: Any update about the Chinese Ilumetri launch?
A: Based on our interaction with the licensee, the product is doing well and is getting accepted in major hospitals. Doctors are happy with the clinical outcomes. It will be part of the global specialty sales, and the sales would be lumpy, happening in some quarters and not in others. - Dilip Shanghvi, Director
Q: Can you elaborate on the clinical capability building mentioned in the annual report?
A: Clinical development capability helps us consider licensing a product with late Phase 2 development, allowing us to do Phase 3, file the product, get regulatory approval, and negotiate with the FDA for the label. These skill sets and capabilities help with the ultimate success of the Specialty product in the marketplace. - Dilip Shanghvi, Director
Q: On Winlevi, IQVIA shows sharp peaks and dips in prescription trends. Can you explain the discrepancy?
A: We have consciously worked towards improving the realization per prescription, which is working well. Although there may be a drop in prescriptions, the product revenue is growing at a healthy pace on a smaller base. - Abhay Gandhi, CEO, North America
Q: How are we thinking about commercialization for the GLP-1 product entering Phase 2?
A: In large markets like the US and Europe, we will consider partnering or licensing the product. In emerging markets and some larger markets, we may have our own capacity to bring the product to market. There is no plan to conduct separate studies for emerging markets; it will be part of a global trial. - Dilip Shanghvi, Director
Q: Any update on the Halol plant from the FDA perspective?
A: Once we are clear, which should be shortly, we will request the FDA for a reaudit of the facility. - Dilip Shanghvi, Director
Q: Can you outline the integration benefits from the Taro consolidation?
A: Taro has been operating as an 80% owned subsidiary for a long time, so there are no major structural changes likely. We are working towards creating an integrated single organization for customers and suppliers. We are not seeing any significant short-term synergy, but as we focus on making our operations more efficient, synergies will work. - Dilip Shanghvi, Director
Q: What is the share of ILUMYA in the psoriasis market in the US?
A: In all categories, it is very small, around 0.5%. In the IL-23 class, it is closer to 8%. - Abhay Gandhi, CEO, North America
Q: How do you see the US generic business growing, and any update on the Halol plant from the FDA perspective?
A: We were already 80% shareholders of Taro, so nothing changes significantly. Both teams are working towards integrating both organizations. For the Halol plant, once we are clear, we will request the FDA for a reaudit. - Abhay Gandhi, CEO, North America and Dilip Shanghvi, Director
Q: What is causing the delay in the atopic dermatitis trial readout for SCD-044?
A: The delay is due to the recruitment of subjects. - Dilip Shanghvi, Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
