Sun Pharma Q3 profit beats Street, to wind down JV with Merck

Company reported net earnings of Rs 1,417 crores for the quarter ended December 31

India's largest drugmaker, Sun Pharmaceutical Industries Ltd, and Merck & Co Inc have agreed to call off their joint venture to develop branded generics for emerging markets due to changes in priorities, the Indian firm said.

Sun Pharma, the world's fifth-largest generic drugmaker, said it would not be materially impacted by the dissolution of the partnership, struck with New Jersey-based Merck in 2011.

The companies' agreements to market the diabetes drug sitagliptin and their licensing deal on Merck's experimental skin disease drug tildrakizumab would continue, Sun Pharma said.

The Mumbai-based company's shares rose as much as 6.5% as it reported net earnings for the quarter ended December 31 of Rs 1,417 crores ($207.52 million), compared with Rs 1,425 crores a year earlier. Analysts, on average, expected a net profit of Rs 1,316 crores.
 

 

 

While sales in its largest market, the United States, fell 11% in the quarter, an 8% rise in revenue in its home market partly made up for that weakness. Emerging markets sales also fell by 7% due to currency volatilities.

Sales of active pharmaceutical ingredients, or drug raw materials, jumped 78%, the company, founded by Indian billionaire Dilip Shanghvi, said.

U.S. sales were hurt mainly due to increasing competition on some products and supply problems due to remediation work going on at its key Halol manufacturing plant in Gujarat.

($1 = 68.2350 Indian rupees)