The country’s largest drugmaker Sun Pharmaceutical said it expects consolidated profit for FY16 to be adversely impacted by expenses or charges arising out of the company’s integration with Ranbaxy as well as remedial actions undertaken.
“As part of the integration process, the company expects to incur integration charges in order to generate long-term synergies from this merger. Also, as a part of the integration, the company may decide to discontinue certain non-strategic businesses,” Sun Pharma said in a statement on Monday.
Sun Pharma said it has undertaken various remedial measures to address the cGMP deviations at the Halol facility. “These remedial measures have resulted in supply constraints for some of the products. We expect this situation to continue for some time till all the remedial steps at Halol are completed,” the statement said.
Sun Pharma said the remedial action at the Mohali, Dewas, Poanta Sahib and Toansa facilities is on track. “We are working towards the fulfilment of the requirement of the US consent decree and will try to expedite the resolution for at least one of these facilities,” it added.
Sun Pharma expects synergy benefits from the Ranbaxy acquisition to increase by 15-20% compared with the original target of $250 million by FY18. “This will be achieved by focusing on the overall profitability improvement driven by revenue and procurement synergies, manufacturing rationalisation and various additional cost-management measures,” the statement said.
In terms of the company’s road map for the future growth, Sun Pharma said it will focus on expanding its range of products and explore opportunities to expand global footprint. “We have recently strengthened our ophthalmology and OTC teams in the US and formed a dedicated team for MK-3222, our IL-23 anti-body which is currently undergoing Phase-III clinical trials,” it noted.
After the consolidation, Sun Pharma expects the company to pursue higher than industry growth in subsequent years. “We continue to allocate significant resources to R&D to strengthen the specialty pipeline including patented products and complex generics. This will mandate increased R&D investments including that for the development of MK-3222,” the drugmaker said.