Sun Pharmaceutical and Industries, the fourth largest pharma company, has suffered heavy setback during the first quarter ended June 2009 mainly due to drop in domestic sales as well as its US subsidiary - Caraco Pharma. It's consolidated net profit declined by 67.3 per cent to Rs 163.84 crore from Rs 501.45 crore in the corresponding period of last year. The consolidated net sales declined by 24.4 per cent to Rs 787.59 crore from Rs 1041.77 crore. Its earning per share nosedived to Rs 7.9 from Rs 24.2 in the last period.

Dilip Shanghvi, chairman and managing director, said, "Performance in the first quarter is overshadowed by the recent developments in our US business. The regulatory setback at Caraco, resulting in seizure of products, does pose a serious hurdle to our business on the path to replicating our past success. While performance of other businesses is in line with our expectations, our focus is get back to delivering a consistent overall performance, overcoming the current challenges our business faces."

Sun's sales of branded prescription formulations in India declined sharply by 27 per cent to Rs 313 crore, largely on account of significantly higher one-time sales in Q4 last year. Caraco's sales in US declined by 56 per cent and its net loss reached at US$ 9.4 million, compared to net profit of US$ 9.4 million in the first quarter of last year.

Its consolidated R&D expenditure reached at Rs 77 crore and this worked out 10 per cent of its net sales. The total number of patent applications submitted now stands at 238 with 76 patents granted. The company and its subsidiaries received ANDAs approvals for 73 products. It filed eight products during the first quarter of 2009-10 and awaits approval for 111 products. A cumulative of 141 DMF/CEP applications made with 83 approved, ensuring better sourcing for key products going ahead.

Sun is still awaiting a judgment from the Supreme Court of Israel on the appeal filed by Taro and the Tender Offer for all ordinary shares of Taro commenced in June 2008 is extended till the injunction issued by the Supreme Court preventing its closure is lifted.