Sun Pharma Q1 net profit falls 20% Y-o-Y; revenue rises 9%

Litigation, drug discontinuation weigh on earnings; US market remains sluggish even as India sales and Leqselvi launch boost specialty push

Sun Pharmaceutical, India’s largest drugmaker, has posted a decline of 20 per cent year-on-year (Y-o-Y) in its consolidated net profit for the first quarter of 2025-26 (Q1FY26).

 

While its net profit was ₹2,278 crore, its revenue from operations rose 9 per cent at ₹13,851 crore.

 

The fall in profit is primarily because of discontinuing the development of SCD-044, an investigational drug (₹287.6 crore), and a litigation settlement involving Taro and SPIINC (₹530.3 crore). This was despite an exceptional tax credit of ₹100.5 crore.

 

Sequentially net profit rose 6 per cent with revenue rising 7 per cent.

 

The muted performance in the United States (US), the company’s largest overseas market, is a key concern, with formulation sales there up only 1.5 per cent Y-o-Y at $473 million, contributing 29 per cent to consolidated revenues.

 

In response, the company is doubling down on its specialty — now rebranded “innovative medicines” — portfolio.

 

“The US launch of Leqselvi represents an important step forward, offering a new treatment option for patients with severe alopecia areata,” said Chairman and Managing Director Dilip Shanghvi. He added that Leqselvi strengthened Sun’s dermatology franchise and was expected to be a growth driver. 

 

The results came during market hours. Sun’s stock fell 1.6 per cent, ending the day’s trade at ₹1,705.5 on the BSE.

 

Leqselvi was launched last quarter and has shown traction. The company views it as a significant milestone in strengthening its innovative medicines portfolio in dermatology.

 

Formulation sales in India stood at ₹4,721 crore, up 14 per cent Y-o-Y, contributing 34 per cent to consolidated sales for the quarter.

 

Sun Pharma retained its number 1 ranking in the Indian pharmaceutical market, with its market share rising from 8 per cent to 8.3 per cent, according to the Pharmarack MAT June 2025 data.

 

The company launched five products during April-June.

 

The company said there was a negligible impact of GLP-1 therapies on its diabetes portfolio.

 

The introduction of GLP-1 drugs in India is unlikely to disrupt its current diabetes product base, and no significant degeneration has been observed, according to the firm.

 

US formulation sales stood at $473 million, up 1.5 per cent, contributing 29 per cent to consolidated sales.

 

Sales of global innovative medicines came in at $311 million, up 17 per cent Y-o-Y, and accounted for 19.3 per cent of consolidated sales.

 

Sales of emerging-market formulations stood at $298 million, growing 5 per cent Y-o-Y and contributed 18 per cent to consolidated sales. Rest of World (RoW) formulation sales were $219 million, up 15 per cent Y-o-Y, representing 13 per cent of consolidated sales.

 

Sun Pharma noted no significant impact from US tariffs, citing a well-established manufacturing footprint in the US that supports business continuity. 

 

Richard Ascroft, chief executive officer of North America, Sun Pharma, stated: “We have a significant footprint in the United States, and at this time, we have no plans to move further manufacturing. We are comfortable with these numbers.” 

 

Sun Pharma remains focused on expanding its innovative-medicine portfolio across dermatology, ophthalmology, and oncology, supported by upcoming launches and pipeline progress. The company expects a cost impact of approximately $100 million in FY26, primarily linked to the launch investments for Leqselvi and Unloxcyt, with amortisation accounted for separately and expenses spread through the year. Sun has renamed its global specialty business “innovative medicines business”.

 

Among specialty portfolio drugs, the company said Illumya’s two Phase 3 clinical studies for active psoriatic arthritis met their primary endpoints, supporting a planned regulatory submission in the US and other markets by the end of CY25. Approval is expected within 10-12 months after filing.  

 

Approximately 30 per cent of psoriasis patients also suffer from psoriatic arthritis, making this an important expansion opportunity.

 

Biosimilar launches in the US have not materially affected the Illumya uptake, with continued recognition from clinicians and strong sales execution driving growth.

 

Philogen, Sun Pharma’s partner, withdrew the marketing-authorisation application for neutrogy from the European Medicines Agency (EMA) during the quarter.

 

The withdrawal was attributed to the need for additional information required by regulators. Philogen intends to refile the application once the requisite data is available.

 

Sun Pharma continues to invest in innovative and generic research and development (R&D). Its innovative pipeline includes six novel entities in clinical stages. In the US, Sun has 542 approved abbreviated new drug applications (ANDAs), 119 pending ANDAs (including 33 tentative approvals), 57 approved NDAs, and 13 pending NDAs.

 

During the quarter, two ANDAs were filed and one ANDA approval was received.