MUMBAI (NewsRise) -- Sun Pharmaceutical Industries, India's largest drug maker, reported a surprise loss in the second quarter, hurt by a one-time payment related to an antitrust litigation in the U.S.
The consolidated net loss for the quarter ended in September stood at 2.19 billion rupees ($30 million), compared with a profit of 9.12 billion rupees a year earlier, the company said in a statement. Analysts were expecting Sun to report a net profit of 10.35 billion rupees, according to Refinitiv data.
The quarter had a one-time settlement charge worth 12.14 billion rupees related to an anti-trust litigation on sleep disorder drug Modafinil in the U.S., the company said. After excluding the one-time item, Sun's profit for the quarter stood at 9.96 billion rupees.
Total revenue from operations grew 4.3% to 69.38 billion rupees. Sales in the U.S. formulations business, which accounts for more than a third of total revenue, grew 11%.
The performance in the quarter "is not a reflection of the underlying health of the overall business," Dilip Shanghvi, Sun's managing director, said in the statement, citing the "successful launch" of Ilumya, used for the treatment of psoriasis, in the U.S.
In May, Sun received the Food and Drug Administration's (FDA) approval for its first biologic drug Ilumya, while in October the company launched the product in the U.S.
"We are fairly positive on our performance for the rest of the year," Shanghvi said.
Sun and its smaller rivals are barely recovering from the effects of falling drug prices in the U.S., where the FDA has been expediting its approval rate for generics and paving the way for increased competition from new players. A rising number of retail pharmacies in the U.S. are joining hands to gain leverage in buying generic drugs in bulk, pushing prices down further.
To skirt the competition in the crowded U.S. generics market, most Indian drug makers, including Sun, have been working toward developing more specialty drugs.
Further, Sun's revenue growth in the U.S. in the last six months has been boosted by the regulatory clearance for its Halol plant in western India's Gujarat state in June. The facility was under a warning letter from the FDA for lapses in quality standards for two-and-a-half years.
Earlier this month, Sun's smaller rival Lupin reported a 42% fall in second-quarter profit as sales in North America dropped amid an increase in overall manufacturing costs. Still, the company forecast better performance in the second half on price stability in the U.S. and expansion in certain specialty drugs.
Ahead of the results, shares of Sun lost 4.7% in Mumbai trading, while the benchmark S&P BSE Sensex gained 1%.
--Dhanya Ann Thoppil