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Sun Pharmaceuticals (SUN.BO; Rs474.95; 2L)
Takeaways from Mumbai — Sun Pharmaceuticals presented at the Citi India
Investor Conference in Mumbai. Below are the key takeaways.
FY12 Guidance Reiterated — SUNP reiterated its revenue growth guidance of 28-
30% over FY11, primarily due to full-year consolidation of Taro’s financials. It
expects R&D spend to be c6% of sales (Rs4-4.5bn range) and a capex of cRs4.5bn
during the year. However, there was no additional color on the components of the
guidance.
Emerging markets to be a key driver — SUNP believes that emerging markets
are a lucrative opportunity and expects strong growth from the biz, as ramp up in
sales force and product portfolio continues (focus on CVS, CNS and Onco
therapies). The recently formed JV with Merck will also add several differentiated
products over the long term.
Generic Prandin Launch — Prandin was filed from the Caraco manufacturing
facility but has already applied for a site transfer. SUNP is in litigation with the
innovator and is awaiting approval from the US FDA. SUNP did not rule out
possibility of an at-risk launch, post ANDA approval.
Other Key Takeaways — 1) Caraco FDA Resolution – FDA resolution process is
currently ongoing and no further update provided on the resolution was provided; 2)
For FY12 & FY13, tax rate to move up slightly as compared to FY11; 3) Eloxatin –
SUNP continues to litigate with the innovator but no specific timeline for launch
provided; 4) Taro’s Canada facility (FDA issues resolved recently) will benefit
marginally from resolution, as some products would come onstream. Even with the
FDA issues, the facility continued to get new product approvals; 5) Docetaxel is a
difficult opportunity, given that it has a lyophillised version - may have to be more
aggressive on pricing.
Maintain Hold — We are bullish on SUNP’s business model in the long term but
maintain our Hold rating, primarily on rich valuations (c22xFY12E EPS).
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Sun Pharmaceuticals (SUN.BO; Rs474.95; 2L)
Takeaways from Mumbai — Sun Pharmaceuticals presented at the Citi India
Investor Conference in Mumbai. Below are the key takeaways.
FY12 Guidance Reiterated — SUNP reiterated its revenue growth guidance of 28-
30% over FY11, primarily due to full-year consolidation of Taro’s financials. It
expects R&D spend to be c6% of sales (Rs4-4.5bn range) and a capex of cRs4.5bn
during the year. However, there was no additional color on the components of the
guidance.
Emerging markets to be a key driver — SUNP believes that emerging markets
are a lucrative opportunity and expects strong growth from the biz, as ramp up in
sales force and product portfolio continues (focus on CVS, CNS and Onco
therapies). The recently formed JV with Merck will also add several differentiated
products over the long term.
Generic Prandin Launch — Prandin was filed from the Caraco manufacturing
facility but has already applied for a site transfer. SUNP is in litigation with the
innovator and is awaiting approval from the US FDA. SUNP did not rule out
possibility of an at-risk launch, post ANDA approval.
Other Key Takeaways — 1) Caraco FDA Resolution – FDA resolution process is
currently ongoing and no further update provided on the resolution was provided; 2)
For FY12 & FY13, tax rate to move up slightly as compared to FY11; 3) Eloxatin –
SUNP continues to litigate with the innovator but no specific timeline for launch
provided; 4) Taro’s Canada facility (FDA issues resolved recently) will benefit
marginally from resolution, as some products would come onstream. Even with the
FDA issues, the facility continued to get new product approvals; 5) Docetaxel is a
difficult opportunity, given that it has a lyophillised version - may have to be more
aggressive on pricing.
Maintain Hold — We are bullish on SUNP’s business model in the long term but
maintain our Hold rating, primarily on rich valuations (c22xFY12E EPS).
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