Sun Pharma said pricing pressure in its generics market targeting the U.S. will likely lead to lower 2019 revenues as India’s largest drug manufacturer continues to have regulatory issues with some manufacturing plants.
The company said in its fourth-quarter and full-year 2018 report that it expects full-year 2019 revenues won’t meet analysts’ expectations due to poor generic sales and rising competition in the U.S. market, which accounts for about 35% of its total revenues.
According to 36 analysts polled by Reuters, Sun’s fiscal 2019 revenue will likely tally 300.36 billion Indian rupees ($4.43 billion), which is roughly 13% better than the 264.89 billion rupees in 2018.
U.S. sales for the fourth quarter were $368 million, representing a 3% decline from the same period last year. Full-year 2018 U.S. sales were $1.3 billion, a 34% drop from the previous year, the company said in a release.
Adding to the pressure are ongoing regulatory issues at some of its manufacturing sites, most notably its Halol plant in India that is a key launch site for U.S. drugs.
“We re trying to get the (Halol) plant recertified at the earliest,” Dilip Shanghvi, Sun’s founder and managing director, said on an analysts’ call. “It’s taking much longer.”
The Halol facility has been in remediation with the FDA since 2014. A reinspection in late 2016 failed to resolve the problems and the U.S. regulatory issued 10 observations, of which many were repeat violations.
Earlier this year, another FDA inspection at the facility located in Gujarat, India, resulted in a Form 483 with three observations.