MUMBAI: Shares of Sun Pharmaceutical Industries Ltd are hovering near the 52-week high hit in early November, giving year-to-date returns of nearly 22%. This growth has largely been a result of the strong performance of the company’s specialty product portfolio.
Sun Pharma’s global specialty business grew 27.5% year-on-year in the second quarter, driven by products such as Ilumya used to treat psoriasis; Sequa, an ophthalmology product; and Vinlevy, a dermatology product. These led to a 14.1% year-on-year (YoY) increase in the company’s US sales, with the US subsidiary Taro reporting a slight decrease in sales during the second quarter.
Going forward, analysts remain positive on the specialty product portfolio.
Sun Pharma’s Ilumya should outperform, said analysts at Jefferies India Pvt Ltd in a report on November 24.
Optimism is fueled by the fact that AbbVie’s psoriasis treatment product Skyrizi posted better-than-expected sales in the first nine months of calendar year 2022 and the product’s sales guidance was revised up to 6%. The product is also doing well in the psoriatic arthritis segment and according to analysts, the company expects the indication to account for 10% of global sales.
Sun Pharma is also conducting clinical trials of Ilumya for psoriatic arthritis indication, which is expected to be completed by 2023-24. Both Skyrizi and Ilumya are anti-IL23 drugs and the performance of Skyrizi could be a good indicator for Ilumya’s future prospects, said analysts at Jefferies.
In Europe, Illumtri (tildrakizumab out-licensed by Sun to Almirol) is performing well, with 46% sales growth guidance in 2022.
Analysts at Jefferies believe that the Street’s base case for Illumia is expectation that the product will continue to do well, and the base case is assuming that Stelara (another drug used in the same indication) will be available in 2023. ) will be off patent. its sale.
Several other analysts already maintain a positive outlook on Sun’s Specialty Portfolio. Shriram Rathi at BNP Paribas Securities India Pvt. Ltd. raised its forecast for higher specialty sales during the second quarter. FY23-25 revenue, earnings estimates have been raised 0-1% and 3-5% respectively, factoring in higher specialty sales and improved gross margin. BNP Paribas expects Sun Pharma to report a CAGR (compound annual growth rate) of 10.5% for revenue and 11.9% for earnings during FY22-25, driven by higher value businesses, India and global specialties Is.
The company’s domestic formulations sales, which contribute almost a third to the total revenue, grew by 8.5% year-on-year. Excluding COVID-related sales in 2QFY22, revenue from the domestic formulations segment grew by 10.9% on a like-to-like basis in 2QFY23.
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