We had built Doxil launch from September 2013. However, an earlier-than-expected approval will lead to incremental revenue of $52 million in FY14, Edelweiss Financial Services said in a research note on Tuesday. Overall, we estimate annual sales of $80 million in FY14 and $68 million in FY15, assuming 30% price erosion and 50% market share (higher than the current share of 35%).
Supplies of Doxil in the US had been constrained after Janssen, a unit of US pharma major Johnson & Johnson, developed manufacturing problems. In order to address the shortage, in February last year, the US FDA, as a special case, allowed Sun Pharma to export Lipodox until J&J could secure its own Doxil supplies.
With the relaunch of Doxil by J&J in October, Suns overall supply had reduced in US, analysts said. However, post final FDA approval for the generic, the company is an authorised distributor and will gain additional market share, they added. Sources also said that patients will gain from the AB-rated generic product that will also be valid for medical insurance cover, unlike a branded product.
Meanwhile, Suns Israel-based subsidiary Taro Pharma posted better-than-expected results for the December quarter.
Taros net profit grew 43% on strong US sales, bringing further cheer to investors.
On Monday, Taro, in which Sun Pharma owns 66.7%, said that the companys net income for the December quarter stood at $88.8 million compared with $62.4 million a year ago, beating analysts expectations. Net sales, on the other hand, was $185.7 million, an increase of $37.6 million, or 25.4%. Sales volumes, however, have slightly declined, the company said.
Price hikes strongly contributed to this growth as sales volumes declined marginally, as per the management, the Edelweiss note said. Ebitda margin of 56% was higher than 51% in the second quarter, led by robust growth in sales and lower SG&A costs, while gross margins were maintained at 75%.
Sun Pharma is looking to buy all of Taros outstanding shares, which could lead to a merger of the two companies. However, an earlier offer was turned down by a special panel of the Taro board. The new offer for shares in August 2012, at $39.59 a piece, is also subject to approvals from minority shareholders, who have been demanding a higher price for their shares.