Sun Pharmaceuticals Ltd. reported a surprise loss in the April-June quarter, missing analyst estimates, due to an exceptional expense related to an antitrust litigation on its Modafinil drug in the U.S.
India’s largest drugmaker posted a net loss of Rs 320 crore in the June-ended quarter, according to an exchange filing on Friday. The company had reported a profit of Rs 2,274 crore in the same quarter last year. Analysts tracked by Bloomberg had estimated a profit of Rs 1,182 crore.
The surprise loss was due to a Rs 950-crore settlement related to its Modafinil drug used to treat excessive sleep disorders. Sun Pharma had in July said that the company and one of its subsidiaries had entered into a settlement in the antitrust litigation in a U.S. district court. The company did not reveal the terms of the settlement.
Revenue fell 25 percent to Rs 6,209 crore year-on-year, largely due to a decline in U.S. sales. The consensus estimate of analysts tracked by Bloomberg had pegged the revenue at Rs 7,091 crore.
Operating income declined 63 percent to Rs 1,095 crore year-on-year, while the margin halved to 17.6 percent from 35.2 percent.
The first quarter performance was “not good” due to increased investments, disruption on account of the Goods and Services Tax and a challenging generic pricing environment in the U.S., Managing Director Dilip Shanghvi said in a press release. “We expect our performance to gradually improve in the second half of this year,” he said.
Geographical Revenue Break-Up
- India sales fell 5 percent to Rs 1,761 crore year-on-year.
- U.S. finished dosage sales slipped 42 percent to $351 million.
- Emerging market sales rose 9 percent to $168 million.
- Rest of world sales grew 37 percent to $115 million.