Sun Pharmaceutical Industries, a Rs 4,275 crore pharmaceutical major, has suffered heavy setback during second quarter ended September 2009 and its consolidated net profit declined by 11.5 per cent to Rs 453.81 crore from Rs 512.77 crore in the corresponding period of last year. Its net sales remained stagnant at Rs 1,185 crore as against Rs 1,178 crore in the last period. With fall in profits, its EPS nosedived to Rs 21.9 from Rs 24.8 in the last period.

According to Dilip Shanghvi, chairman and managing director of the company, “Performance across all business segments remains in line with our expectations, as borne out by the financials. Caraco, which signed a consent decree with the US FDA last month, continues to work towards regaining full cGMP compliance.  We expect the core business momentum around growing profitably as well as developing, registering and launching new products to remain intact.”

For the first half ended September 2009, Sun Pharma’s consolidated net profit declined by 49 per cent to Rs 517.65 crore from Rs 517.65 crore from Rs 1,014 crore in the corresponding period of last year. Its net sales declined by 11.1 per cent to Rs 1,973 crore from Rs 2,220 crore. Its EPS moved down to Rs 29.8 from Rs 49 in the last period.

Sales of branded prescription formulations in India were at Rs 471 crore for the second quarter, a growth of 5 per cent over the same quarter last year, contributing 39 per cent of total sales.  For the first half, domestic formulation sales were at Rs 784 crore. The company launched nine key products during the quarter, taking the total for the first half to 21.

As announced earlier by Caraco Pharmaceutical Industries, Ltd, it has signed a consent decree with the US FDA, offering clarity on the path it pursues to resolve the cGMP issues that resulted in seizure of drugs in June 2009.

Reflecting the full impact of the cessation of manufacturing activity after the FDA action, Caraco had recently announced Q2 FY10 sales of USD 78 million, up 63 per cent from the immediate preceding quarter.  Caraco recorded a net profit of USD 6.7 million for Q2 FY10.  For the first half, Caraco reported sales of USD 126 million and net loss of USD 2.8 million.  Pantoprazole generic, launched at-risk with the patent litigation pending, continues to be sold in the US.

Between Sun Pharma and Caraco, ANDAs for 79 products are now approved.  In the second quarter, ANDAs for 3 products have been filed between Sun Pharma and Caraco. With this, in the first half, ANDAs for a total of 11 products have been filed.  During the second quarter, ANDAs for 6 products from Sun Pharma have been approved.  Counting this, ANDAs for 108 products now await USFDA approval, including 10 tentative approvals. This pipeline is expected to build revenues for our US generic business in the years ahead.

Consolidated R&D expense for Q2 FY10 was Rs 62 crore, or 5 per cent of net sales.  For the first half, the consolidated R&D expense was Rs 139 crore, or 7 per cent of net sales.

A cumulative of 144 DMF/CEP applications have been made, with 84 approved so far. The total number of patent applications submitted for Sun Pharma now stands at 239 with 76 patents granted so far.