An one-off Rs 950 crore payment to settle an anti trust litigation coupled with weak performance in core India and US markets resulted in Sun Pharmaceutical Industries posting Rs 424 crore loss in first quarter FY 2018. In same period last year the company had posted a profit of Rs 2,037 crore.
Revenue dipped 23 per cent to Rs 6,167 crore owing to continued pricing pressure in the US, regulatory challenges and GST-led de stocking in the domestic market.
Domestic sales declined 5 per cent while US market revenue was down 42 per cent. The company's US subsidiary has seen 30 per cent decline in sales on a year on year basis. Also the first quarter sales in last financial year had a high base impact owing to the six months exclusivity in sale of anti-leukemia drug Gleevec. Overall pricing pressure also impacted the growth.
Profit before tax and exceptional items fell 70 per cent to Rs 791 crore. A Rs 950 crore outgo to settle a litigation in the US dragged the company to loss.
Sun Pharma agreed to pay $147 million (about Rs 950 crore) to Apotex Corporation and Retailer Purchasers to settle a lawsuit which accused subsidiary Ranbaxy of accepting payments from drug maker Cephalon to delay the launch of generic version of latter's sleep disorder drug. The litigation pertained to a patent dispute settlement which Cephalon entered with Ranbaxy and three companies delaying the launch of generic version of drug till 2012.
"Our Q1 performance was not good and not in line with our past performance due to combined impact of increasing investments in our global specialty business, temporary disruption in our India business due to GST implementation, a challenging US generic pricing environment and Modafinil settlement. We expect our performance to gradually improve in the second half of this year," Sun Pharma's managing director Dilip Shanghvi said in a statement.
Sun Pharma stock has slumped 44 per cent since last August and and has hit a four year low in view of pressure in key markets and regulatory challenges. The company's main Halol plant remains under US Food and Drug Administration scanner and warning letter in December 2015 limited supplies to the US.
The stock closed 1.9 per cent down at Rs 451.30