Sun Pharma Declines as Regulatory Issue Puts Pressure on Profit
Monday, February 16, 2015
Sun Pharmaceutical Industries Ltd., India’s largest drugmaker, fell in Mumbai trading as quarterly profit came under pressure from efforts to address regulatory issues at one of its factories.
Sun Pharma fell as much as 3.5 percent to 907.30 rupees in Mumbai today before trading at 915.25 rupees at 9:34 a.m. local time, the biggest decliner on the benchmark S&P BSE Sensex Index. Net income in the three months ended Dec. 31 fell 7 percent to 14.3 billion rupees ($230 million), the Mumbai-based company said Saturday, missing the median estimate of 16.5 billion rupees from 31 analyst estimates compiled by Bloomberg.
Earnings were hurt by supply constraints arising from efforts to boost compliance at a drug factory in the Indian city of Halol, the company said. The plant was inspected by the U.S. Food and Drug Administration last year. Sun Pharma has to make changes to operating procedures and processes to meet compliance expectations for the plant, Chairman Dilip Shanghvi said on a call with analysts.
“While we do this, the supplies of the facility will be constrained,” Shanghvi said. Sun expects to resolve the constraints in the current quarter.
Ranbaxy Laboratory Ltd.’s parent Daiichi Sankyo Co. in April agreed to sell its controlling stake in Ranbaxy to Sun Pharma. The deal came after Tokyo-based Daiichi Sankyo had taken writedowns on the Indian drugmaker, seen its own share price slide, and failed to raise manufacturing conditions at the unit to levels that would pass muster with the FDA.
Since then, the FDA has rescinded approvals for two of Ranbaxy’s products: generics of AstraZeneca Plc’s Nexium for heartburn and Roche Holding AG’s Valcyte. Sun Pharma expects to meet its sales guidance for the fiscal year ended in March.
Source : http://www.bloomberg.com/
