India's Sun says consolidation efforts on track, eyes share buyback


Mumbai-based Sun Pharmaceutical Industries showed confidence in its full-year results, noting its board will discuss a plan later in June to buy back shares and that efforts to consolidate operations related to its purchase of Ranbaxy Laboratories in 2014 were on track.

“This has been a year of consolidation for us ... while we have accrued targeted synergies from the Ranbaxy acquisition, we have also made commensurate investments in building the specialty business in the U.S.," Dilip Shanghvi, managing director, said in a statement.

Net profit for the year ended March 31 rose nearly 93% to INR17.1 billion ($255 million)--though short of expectations--and the company said on its earnings call that it does not expect a U.S. Justice Department antitrust probe into generic pricing patterns to impact the company.

The company, in an earnings call with analysts, noted that sales of its copycat version of Novartis' ($NVS) cancer drug Gleevec/Glivec (imatinib) in the U.S. under a 180-day exclusivity period that ends this summer performed well--but exact figures were not provided.

In Novartis' first quarter earnings call, David Epstein, former head of pharma for the company before its pharmaceutical and cancer units were split earlier this month, said he expected several new players in the market when the exclusivity ends in the third quarter.

At the same time, analysts poring over the Novartis figures suggested 35% to 40% price erosion in the U.S. for Gleevec since Sun launched on Feb. 1, with Novartis retaining over 50% market share.

Earlier this week, Sun said it was among firms slapped with subpoenas from the U.S. Justice Department over a probe into rising costs for generic drugs.

The company--the world's fifth largest generics maker--is under the scanner related to the antibiotic doxycycline hyclate, which reportedly doubled in price since 2014, according to a story carried in the Hindustan Times.

Other generic drugmakers, namely Endo International and Mylan ($MYL), were reportedly queried last year on their doxycycline products, the newspaper said.

According to the report, the antitrust division of the Department of Justice wants a series of documents that include employee correspondence, company record and communications with competitors.

Sun, according to the Economic Times in a separate report, said the inquiry is unlikely to have any material adverse impact on the consolidated operations or consolidated financial results.

- here's the Sun release
- here's the Business Standard story
- here's the DoJ story from the Hindustan Times