Sun sets Q1 loss at Rs 1,276 cr on one-off charge

Written by fe Bureau | Mumbai | Updated: Aug 10 2013, 10:27am hrs
Indias largest pharmaceutical firm by market capitalisation, Sun Pharmaceutical Industries on Friday reported a net loss of R1,276.1 crore for the April-June quarter, resulting from an exceptional charge on account of the settlement in a patent infringement litigation related to generic versions of Protonix. The company had posted a net profit of R795.5 crore for the corresponding quarter in the previous fiscal.

The companys net sales, however, rose a smart 31% year-on-year to R3,482.2 crore though the Ebitda (earnings before interest tax and depreciation) margin slipped 200 basis points y-o-y to 44%. Sun managing director Dilip Shanghvi said revenues at the companys subsidiaries had been strong during the quarter. Shanghvi added that after the implementation of the new Drug Price Control Order, 40 of Suns products will be under the new price list.

All our businesses continue to perform in line with our expectations and we remain focused on strengthening our existing businesses and developing a differentiated and specialty-driven product basket, he said, adding that Sun Pharma continued to review opportunities to expand and strengthen its global footprint. The company also said that it has completed the process of transferring its domestic formulations business to Sun Pharmaceutical Laboratories, a wholly owned subsidiary.

Post the payment for the (Protonix) litigation, the companys cash reserves stand at slightly less than R6000 crore, Shanghvi said on a call with analysts. Sun Pharma settled an ongoing litigation in a US district court around its subsidiarys generic pantoprazole. As part of the litigation settlement between Sun Pharma and Wyeth, (now a division of Pfizer) and Altana Pharma (now known as Takeda), the company will pay a lump-sum $550 million (R3,101 crore). The company had already provided R584 crore in the second quarter for 2012-13 towards this liability and made a provision of R2,517 crore in the June quarter this year.

Sun Pharma launched 10 products in the first quarter of this financial year. Sales of branded prescription formulations in India were at R849 crore, an increase of 44% from the same period of the previous fiscal, accounting for about a fourth

of the pharmaceutical companys total sales. Close to 58% of the companys sales came from the US and at $364 million, were up by 28% year-on-year.

Sun Pharmas consolidated R&D expense for the

quarter under review was R205 crore, which is 6% of sales. The company filed ANDAs for four products during the quarter. The total number of patent applications submitted now stands at 791, with 503 patents granted so far, the company said. Sun Pharmas market capitalisation as of August 8 was R1.05 lakh crore.