(Bloomberg) -- Sun Pharmaceutical Industries Ltd. reported a better-than-expected quarterly profit as sales of its specialty treatments in the US continued to bolster India’s largest drugmaker despite rising costs across the industry, as well as price erosion in the non-patented medicine market.
Mumbai-based Sun Pharma posted a 43% gain in net income to 20.6 billion rupees ($260 million) for the quarter ended June 30, compared to the average profit estimate of 17.18 billion rupees based on a survey of analysts by Bloomberg.
Revenue rose 11% to 107.6 billion rupees, according to an exchange filing Friday while total costs climbed 14% to 84.8 billion rupees compared to the same period last year.
While many Indian pharmaceutical companies are struggling with increased competition and waning generic drug prices in the US -- one of the industry’s most lucrative overseas markets -- Sun’s push into specialty high-margin chronic treatments in the west have shielded it from the worst of the downturn and has increasingly won over investors.
“All our businesses recorded good growth, driven by a combination of sustained scale-up for our specialty business and all-round growth across markets,” Dilip Shangvhi, Sun’s billionaire owner and managing director, said in a statement, adding that the firm’s specialty business grew 29%. “We have been able to report healthy margins despite rising costs.”
‘Strong Growth’
Sun Pharma’s shares jumped as much as 6.4% in Mumbai after the earnings were announced, pushing this year’s rise to almost 11%, compared to the 1.6% decline of India’s benchmark S&P BSE Sensex index over the same period.
In the company’s two largest markets, India formulation sales climbed 2.4% to 33.87 billion rupees compared to the same period last year, while US medicine sales rose 10.7% to $420 million.
“Strong growth in specialty, US generics and domestic formulation can support earnings,” Saion Mukherjee, a Mumbai-based analyst at Nomura Holdings Inc., wrote in a report Thursday. “Going ahead we expect cost synergy benefits from the Alchemee acquisition to also play out at Taro.”
Taro Pharmaceutical Industries Ltd. is Sun Pharma’s Israel-based subsidiary that gets bulk of its revenues from North America and closed the purchase of Alchemee from Galderma in March.
Sun Pharma also pushing its specialty therapies into newer markets. It expanded its licensing agreements with a unit of Cosmo Pharmaceuticals NV for its acne-treatment Winlevi this month to include Japan, Australia, New Zealand, Brazil, Mexico and Russia. Sun and Cosmo unit, Cassiopea, already have a pact for the American and Canadian markets for Winlevi which was introduced in the US in November last year.