Sun Pharma has suffered a gut-wrenching drop in its sales in the U.S. as ongoing regulatory restraints for Sun Pharma’s key API plant in India, along with generic pricing pressures, did a number on the drugmaker’s final quarter.
The company issued a release on Friday reporting that sales in the U.S. were off 34% to $381 million for its fourth quarter ended March 31. The U.S. shortfall contributed to an 8% fall in revenues across the board for India’s largest drugmaker. Sun’s profit was down 14% to $189.6 million in the quarter.
Sun's Managing Director Dilip Shanghvi said on a recorded earnings call that propopects for next year are no better. "We may even have a single digit decline in consolidated revenue for full-year 2018 versus full-year 2017."
A part of that hit in the U.S. was because Sun benefited in last year's fourth quarter from its 180-day exclusive of its generic of Novartis’ cancer fighter Gleevec, and part of it was the pressure on prices that all generics makers have felt. Its problems in the U.S. were further complicated by a 26% sales drop at its U.S. subsidiary, specialty generics drugmaker Taro, where sales were down 26% to $196 million.
New drug launches might have made up for some of those issues, but Sun execs acknowledged in an earnings call that “Growth has been partly restrained by the delays of approvals because of the problems at Halol.”
They said that since the company has yet to satisfy regulators with the fixes they have put in place so far at the plant, the company is looking at transferring applications for some yet-to-be-approved drugs to other facilities to mitigate revenues pressures this year.
Halol is the plant from which Sun expected to launch most of its new drugs for the U.S. market, but in 2014 the FDA raised concerns about the facility, citing it with a Form 483. Then in 2015, the agency slapped the plant with a warning letter citing a variety of issues, from not having controls on computers to keep data from being altered by employees, to a leaky ceiling that could contribute to production contamination.
The company brought in consultants and invested in new systems to meet FDA expectations. Sun believed that with all of that effort, a return visit by FDA inspectors late last year would finally clear the plant of its regulatory overhang, allowing Sun to again launch new products from the facility. Instead, the FDA cited the facility again, leaving Halol in limbo for new drugs while the company continues to address issues.