After the fall of 17 percent from the beginning of the year to the lower level of March, the shares of the country’s largest pharmaceutical company Sun Pharmaceutical Industries have compensated for about half of their losses. Fresh acquisitions, Hair Los related drugs related to court friendly decision in Lakeselvi, an increase in competitors due to specialty portfolio and a varied global access to compensate for the decline in the stock
Helped.
The main reason for the decline in this stock since January is a dull US growth, increasing research and development (R&D) expenses, regulatory challenges related to USFDA and pricing pressure in the generic segment. Nevertheless, most brokerage remains excited at the company’s long -term scenario. The stock was recently promoted by the decision of an American court in favor of Sun on Lexelvi. The court removed the initial prohibition, paving the way for a possible launch of the drug, which would meet the $ 400 million market requirement.
Although any new offer will be challenging and it is unlikely to benefit sales and income in the short term, MK Research believes that the opportunity of laxelvi will reach the level of Plack Psoriasis by 2029–30 (which will be more than $ 50 million). Other factors are the acquisition of US-based fast-Frealor company Checkpoint Theraputics. Immunotherapy and the respective oncology firm were acquired for $ 35.5 million, which included opportunities related to the $ 6.1 million future opportunities. Advance payment was made on 7 March at a 66 percent increase against the closed price of checkpoint.
The deal has expanded the global dermatology-centered specialty portfolio of Sun. Along with this, the drug approved by the FDA has also come to the unloxic, which is used to treat metastatic skin cancer in adults, it is a segment that has a US market size of $ 1 billion. Despite the high price, the Ilara Securities seems to have good possibility in the acquisition. Brokerage analyst Beeno Pathipil said, “Our analysis suggests that Anloxict can reach an annual sales of $ 200 million in the US. Since Sun already has a sales team related to dermatology, the additional cost of drug marketing will come down.
Keeping the future in mind, the market will keep an eye on signs of improvement in American business. Revenue in the US business declined by 1 per cent on an annual basis during the October-December quarter and 8 per cent on quarterly basis. This decline came due to low sales of generic version of cancer drug revalimid and ongoing price related pressure in generic drugs. Brokers are looking at this poor performance with manufacturing issues (including warning letters and import alerts) and hoping that it may take some quarters time to stabilize.
HSBC analysts Damayanti Kerai and Gaurang Sakare remain positive on the special order flow of Sun, including Ilumya (psoriasis), Vinlavi (Acne) and Serv (Dry Eyes). Although some medical trials have been delayed, Brokerage believes that Sun will continue to prioritize investment in R&D for its specialty portfolio. HSBC has given a ‘buy’ rating for this stock with a price target of Rs 2,000.
Kotak Research has maintained a ‘acute’ rating for this stock. Despite the high R&D expenses to increase the clinical flow, analyst Alankar Garuda has estimated the operation margin 200 base points to improve 28.8 per cent during 2023-24 to 2026-27, as it will help with strong special margin and better domestic productivity.
Amid tariffs related uncertainties, companies such as flax may stay away from pressure in the US, as there is less competition in the night segment. Specialist products in Sun’s US revenue accounts for about 55–57 percent. A large part of the profits also comes from India and other markets, which helps in reducing possible damage from the US.
Unlike the US market, the domestic pharma business of Sun is growing rapidly. It recorded a 14 per cent growth in the third quarter and several major therapy segments saw a higher growth than the market. Brokers are expected to retain the trend in the Indian formulation segment due to sales growth.
First Published – April 13, 2025 | 10:49 pm IST
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