Sun Pharmaceuticals Industries Ltd. Earnings Call Insights: United States Sales, Nystatin & Doxycycline

Sun Pharmaceuticals Industries Ltd.  recently reported its first quarter earnings and discussed the following topics in its earnings conference call.

United States Sales

Anubhav Aggarwal – Credit Suisse: Dilip, first question on the U.S. sales. If you see the sequential increase in sales ex-Taro, would you say that, that increase is largely driven by ramp up of the products which were there till March quarter or was driven by the launch of the new product? I know it’s a combination, but what would you be like, largely contributing it to?

Dilip S. Shanghvi – Managing Director: No, I think, as I explained, there is an impact of good performance from URL as well as DUSA, which were not there in the previous quarter, and we see improvement in all products including some new products which we would’ve introduced in the existing Sun product pipeline.

Anubhav Aggarwal – Credit Suisse: Dilip, my reference was the March quarter, not the June ’12 quarter. March ’13 quarter was this quarter, where DUSA and URL, both were present.

Dilip S. Shanghvi – Managing Director: URL was only for part of the quarter, Anubhav.

Anubhav Aggarwal – Credit Suisse: Okay. So, it’s a ramp up, you’re saying. So, largely saying that the contribution from the new product, would have been low this quarter?

Dilip S. Shanghvi – Managing Director: No, what I think Anubhav I have indicated is that there is a significantly high performance both in DUSA and URL, which may not continue at the same pace. So I don’t want this to form a basis for future projections.

Anubhav Aggarwal – Credit Suisse: My second question is on Doxil. Now your generic is available post your approval in Feb ’13 and of course it is at a discount to the innovative drug. I am slightly worried. Of course, this is all indicated by IMS numbers. IMS indicates that your market share roughly is about 50%. This is very peculiar situation where only generic is available and generic only having 50% market share, can you frame that? Is it due to the fact that you price difference what you have versus the branded drug is very low, could that be a reason?

Dilip S. Shanghvi – Managing Director: That maybe one of the reasons, yes.

Anubhav Aggarwal – Credit Suisse: But other than that any other things, because I haven’t seen it ever?

Dilip S. Shanghvi – Managing Director: No, I understand. I think there would be a certain what you call, complexity in terms of players to switch the place. So we are not surely cognizant of all the dynamics in one. We will continue to work towards gaining market share. At the same time we also have to keep in mind that it’s important for Johnson & Johnson also to treat because it’s an important product and continue to promote it. So if we take away the full market then actually not find it attractive to promote.

Nystatin & Doxycycline

Sameer Baisiwala – Morgan Stanley: For Nystatin and Doxycycline, now Nystatin it’s been a few weeks, or was it a couple of months that Sandoz had entered into the market and for Doxil also West-Ward/Hikma has been around for two, three months. Do you think that if you consider just the active players in both these product markets, has the market now stabilized?

Dilip S. Shanghvi – Managing Director: I mean difficult to predict because while we may say that supply position may have stabilized, but also I think because of the significant change in the price many of the peers would also look at less expensive options. So, we would see erosion in volume.

Sameer Baisiwala – Morgan Stanley: But within the active players you think the dynamics are more or less settled down?

Dilip S. Shanghvi – Managing Director: No, it is not continuous and then if something changes then your equilibrium is established…

Sameer Baisiwala – Morgan Stanley: Just referring to your comment in the press release that you’re talking about the Company focusing on developing differentiated and specialty driven business. Is it possible for you to share some more details on this? What technology platforms or what product categories that you had in mind, when you said this?

Dilip S. Shanghvi – Managing Director: I think generally, when I say differentiated my view is products in which I’m not expecting too much competition. We’re now going into specifics of technology or the kind of products. So, that we have a relatively stable and consistent cash flow and sales.

Sameer Baisiwala – Morgan Stanley: Just as an extension of the same question, would you be able to confirm that you’ve a few nasal sprays and auto injectors which are already filed with the FDA?

Sudhir V. Valia – Executive Director: You don’t expect us to answer this no?

Sameer Baisiwala – Morgan Stanley: I’ll still try. Thank you, so much.