Taro Pharma, Sun Pharma’s U.S. Unit, Sees Revenue Improve But Outlook Remains Cautious
Sun Pharmaceutical Industries Ltd.’s U.S. subsidiary witnessed a rise in revenue over the preceding quarter, a period when the Covid-19 pandemic hurt sales of its key dermatology segment and as it adjusted for settlements of drug price-fixing charges.
Revenue of Taro Pharmaceutical Industries Ltd. rose 21% sequentially to $143 million in the quarter ended September, according to a media statement on its website. Its gross margin, too, improved 191 basis points over the preceding three months to 56.5%.
The U.S. business accounts for more than 30% of Sun Pharma’s overall consolidated sales. Taro Pharma contributes nearly half of the parent’s total U.S. formulation sales.
“The performance in this quarter is a result of improving sales across all our business segments over the first quarter, even while continuing to be negatively impacted by the pandemic. Our teams have worked tirelessly to serve our customers and patients through these tumultuous times as evidenced by regular product launches and steady market shares,” Uday Baldota, chief executive officer at Taro Pharma, said in the release. “With the recent surge in Covid-19 in our key geographies, and the resulting mitigation steps by respective authorities, we are cautious about the impact on our business for the rest of the year. However, our longer-term commitment to enrich our product portfolio, organically or otherwise, stays as strong.”
According to Edelweiss, while revenue was ahead of its expectations, it doesn’t expect a meaningful beat to Sun Pharma’s consolidated numbers as the Indian drugmaker’s specialty portfolio may take a bit longer to recover. Modest Taro Pharma’s margin, the brokerage said, is unlikely to drive a margin beat for the parent.
Sun Pharma is set to announce its results for the quarter ended Sept. 30 on Nov. 3.
Other highlights of Taro Pharma’s September quarter performance:
- R&D expenses were back in the reported quarter after a slump in the first three months owing to Covid-19.
- Selling, general and administrative expenses also saw a sequential jump of 8%.
- Ebitda margin, too, was higher sequentially.
Shares of Sun Pharma were trading 1.95% lower in the afternoon trade on Thursday, compared with a 0.9% drop in the Nifty 50 Index.