MUMBAI (NewsRise) -- Sun Pharmaceutical Industries reported a better-than-expected first-quarter profit, aided by rising sales in the U.S. where India's largest drug maker is slowly making inroads into innovative medicines.
Consolidated net profit for the quarter ended in June stood at 9.83 billion rupees ($140 million), compared with a loss of 4.25 billion rupees a year earlier. Analysts surveyed by Reuters had expected the company to report a net income of 8.97 billion rupees.
The year-earlier quarter had a one-time settlement charge worth 9.51 billion rupees related to anti-trust litigation on sleep disorder drug Modafinil in the U.S., the company said.
Total revenue from operations grew 16% to 72.24 billion rupees, while sales in the U.S. formulations business, which accounts for a third of total revenue, grew 8%.
"We are gradually crossing key milestones in our specialty initiatives with the recent commercialization of Yonsa in the U.S. and targeted launch of Ilumya and Cequa in the coming quarters," Dilip Shanghvi, Sun's managing director, said in a statement.
In May, Sun received the Food and Drug Administration approval for its cancer drug Yonsa, while in March it won the approval for its first biologic drug Ilumya, used for the treatment of psoriasis.
Sun and 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.
Shanghvi said the company is awaiting approvals for two more specialty products, Xelpros and Elepsia, used to treat glaucoma and epilepsy, filed from its Halol plant that was until recently under a warning letter from the FDA. In June, the U.S. drug regulator cleared Sun's key plant in western India that had been reeling under quality concerns for two and a half years.
Last month, Sun's smaller rival Dr. Reddy's Laboratories reported a seven-fold jump in first-quarter net profit, gaining from the launch of a generic version of de-addiction drug Suboxone in the U.S. Another competitor Lupin's profit, however, disappointed with a 43% drop in profit, weighed by declining sales in the U.S. and Japan.
Shares of Sun surged as much as 8.1% to touch their 52-week high in Mumbai trading Tuesday. The stock later pared those gains to close up 6.9%, while the benchmark S&P BSE Sensex gained 0.6%.
--Dhanya Ann Thoppil