Sun Pharma to benefit from strong outlook for its specialty portfolio

MUMBAI: Shares of Sun Pharmaceutical Industries Ltd have been hovering close to the 52-week excessive hit earlier in November, with the inventory having given a return of round 22% year-to-date. The upswing has largely been a results of the strong efficiency of the corporate’s specialty product portfolio.

Sun Pharma’s world specialty enterprise grew 27.5% year-on-year in Q2, pushed by merchandise as Ilumya, used to deal with psoriasis; Cequa, an ophthalmology product; and Winlevi, a dermatology product. These helped firm’s US gross sales rise 14.1% year-on-year (YoY) throughout Q2 regardless of the US subsidiary Taro reporting marginally decrease gross sales.

Going ahead, analysts stay constructive on the specialty product portfolio.

Sun Pharma’s Ilumya ought to carry out nicely, mentioned analysts at Jefferies India Pvt Ltd. of their report dated 24 November.

The optimism is boosted by the truth that AbbVie’s psoriasis therapy product Skyrizi clocked higher than anticipated gross sales in 9 months calendar yr 2022 and the gross sales steering for the product was revised upwards by 6%. The product is doing nicely within the psoriatic arthritis phase as nicely and the corporate expects 10% of world gross sales from the indication, as per analysts.

Sun Pharma can be conducting Ilumya’s medical trials for psoriatic arthritis indication, that are anticipated to be full by 2023-24. Both Skyrizi and Ilumya are anti-IL23 medicine and Skyrizi’s efficiency may very well be an excellent indicator for Ilumya’s future prospects, mentioned analysts at Jefferies.

In Europe, Ilumetri (tildrakizumab out licensed by Sun to Almirall) continues to do nicely, with 2022 gross sales development steering of 46% YoY. 

Analysts at Jefferies consider the Street’s base case expectation for Ilumya is that the product will proceed to do nicely, and the bottom case is assuming that Stelara (one other drug utilized in similar indication) going off-patent in 2023 won’t have a cloth impression on its gross sales.

Many different analysts have already got maintained constructive view on Sun’s specialty portfolio. Sriram Rathi at BNP Paribas Securities India Pvt. Ltd has raised estimates on increased specialty gross sales throughout Q2. The FY23-25 income, earnings estimate have been raised by 0-1% and 3-5% respectively, factoring in increased specialty gross sales and a greater gross margin. BNP Paribas expects Sun Pharma to report a CAGR (compound annual development price) of 10.5% for income and 11.9% for earnings over FY22-25, pushed by high-value companies, India and world specialty.

The firm’s home formulation gross sales contributing nearly third to general revenues, had grown 8.5% development year-on-year. Revenue from the home formulations phase grew 10.9% in 2QFY23 on a like-to-like foundation, excluding COVID-related gross sales in 2QFY22.

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