Sun Pharmaceutical
Industries
4Q Beat, Robust F14
Guidance – 18-20% Growth
Quick Comment – Sun reported F4Q13 results
ahead of our expectations: Sales were up 32% yoy
(7.7% qoq) and operating margins expanded 10bps to
41.3% (contracted 320bps qoq). Together that led to a
23% rise in net profits to Rs10.1 bln (our forecast was
Rs8.7 bln). During the quarter, Sun benefited from a
sharp (but temporary) spike in doxycycline, generic
Doxil launch and DUSA (full quarter)/URL (2 months).
Strong F14 guidance: On a high sales base of F13 (up
41% to US$2 bln), Sun has guided for 18-20% growth in
constant currency terms in F14. This will include the
full-year benefit from URL/DUSA ($100 mln incremental
uplift), but F14 guidance also absorbs one-off
opportunities in F13 (Lipodox, doxycycline) and Taro
pricing risk. Other elements of guidance include – R&D
expenses (6-8% of sales), Rs8 bln capex, 25 ANDA
filings and 18-20% tax rate. The company has net cash
of $1.3 bln as of March 2013.
Conference call highlights: Sun remains excited
about the growth prospects in regulated markets. It
continues to pursue its plans to gain scale in controlled
substance-based drugs in the US. It seeks to scale up
DUSA’s 6% share in the actinic keratoses (AK) market
through higher device installation and rising usage per
device. SPARC is in dialogue with FDA for levetiracetam
XL, and one way to overcome bioequivalence in fed
condition is to increase the patients in trial. Starhaler has
been launched in May in select cities in India. Near-term
risks include 1) possible entry of Sandoz in Taro’s
largest product (nystatin/trim) and 2) upcoming jury trial
in June 2013 for Protonix.
We reiterate our OW rating on Sun: We expect the
company to continue to deliver strong growth over the
next couple of years. Please see our latest report – Sun
Pharmaceutical Industries – Asia Insight: Best Getting
Better, dated May 12, 3013 for details
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Industries
4Q Beat, Robust F14
Guidance – 18-20% Growth
Quick Comment – Sun reported F4Q13 results
ahead of our expectations: Sales were up 32% yoy
(7.7% qoq) and operating margins expanded 10bps to
41.3% (contracted 320bps qoq). Together that led to a
23% rise in net profits to Rs10.1 bln (our forecast was
Rs8.7 bln). During the quarter, Sun benefited from a
sharp (but temporary) spike in doxycycline, generic
Doxil launch and DUSA (full quarter)/URL (2 months).
Strong F14 guidance: On a high sales base of F13 (up
41% to US$2 bln), Sun has guided for 18-20% growth in
constant currency terms in F14. This will include the
full-year benefit from URL/DUSA ($100 mln incremental
uplift), but F14 guidance also absorbs one-off
opportunities in F13 (Lipodox, doxycycline) and Taro
pricing risk. Other elements of guidance include – R&D
expenses (6-8% of sales), Rs8 bln capex, 25 ANDA
filings and 18-20% tax rate. The company has net cash
of $1.3 bln as of March 2013.
Conference call highlights: Sun remains excited
about the growth prospects in regulated markets. It
continues to pursue its plans to gain scale in controlled
substance-based drugs in the US. It seeks to scale up
DUSA’s 6% share in the actinic keratoses (AK) market
through higher device installation and rising usage per
device. SPARC is in dialogue with FDA for levetiracetam
XL, and one way to overcome bioequivalence in fed
condition is to increase the patients in trial. Starhaler has
been launched in May in select cities in India. Near-term
risks include 1) possible entry of Sandoz in Taro’s
largest product (nystatin/trim) and 2) upcoming jury trial
in June 2013 for Protonix.
We reiterate our OW rating on Sun: We expect the
company to continue to deliver strong growth over the
next couple of years. Please see our latest report – Sun
Pharmaceutical Industries – Asia Insight: Best Getting
Better, dated May 12, 3013 for details
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