Re: {LONGTERMINVESTORS} Sun Pharma : thread

[RAJESH DESAI]

Shares of Sun Pharmaceutical Industries, country's largest pharmaceutical company by market cap, gained more than 1% as the company and Taro announced today that they have entered into a merger agreement.
 
In a press release sent to exchanges, the company said all shareholders of Taro other than Sun Pharma and its affiliates will receive a cash payment of USD 39.50 a share upon the closing of the merger.

After the merger, Taro will become a privately held company, will be wholly owned by affiliates of Sun Pharma, and its ordinary shares will no longer be traded on the New York Stock Exchange.

On Wed, Apr 18, 2012 at 2:56 PM, karishma suvarna <karishma...@gmail.com> wrote:

• Sun Pharma wins US case for Prandin copy; FDA nod now key 

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Karishma Suvarna

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CA. Rajesh Desai

[Rajesh Desai]

Sun Pharmaceutical Industries has received final approval from the USFDA for its Abbreviated New Drug Application (ANDA) for generic version of Rilutek Tablets. Rilutek (riluzole) is a benzothiazole drug indicated for the treatment of patients with amyotrophic lateral sclerosis (ALS).

Earlier in this month, the company received final approval from the USFDA for its ANDA for generic version of Depo-Testosterone Injection, Testosterone Cypionate Injection USP, 100 mg/ml and 200mg/ml.

On Thu, Jun 13, 2013 at 2:04 PM, Dilip Kulkarni <kulkar...@gmail.com> wrote:

MS -

Quick Comment: Sun Pharma announced a settlement for the generic Protonix patent litigation with Wyeth (now a division of Pfizer) and Altana. Pursuant to this settlement, Sun will pay a lump sum amount of US$550mn to Pfizer. The company had net cash of US$1.3bn as of March 2013 (of which about US$520mn is with Taro, Sun's 66%-owned subsidiary) and generated US$500mn in free cash from operations.

Story so far: In Jan-08, Sun launched generic Protonix "at risk" (the underlying patent challenge court case was pending), following the District Court's denial of Wyeth's (now Pfizer) preliminary injunction (PI), and Teva's (at risk) and AG launch. The Appeals Court upheld the District Court's decision on the PI motion (May 2009). However, a jury ruled in favor of Wyeth on April 23, 2010, upholding the validity of the patent. After this, Sun stopped shipments of generic Protonix. Subsequently, the generic companies filed to overturn the jury's verdict, which was denied by the District Court in July 2010.

Implication: We estimate that Sun has grossed US$350-400mn in sales and US$250-300mn in profit from this product since January 2008. The settlement is in excess of our estimate (US$300mn) and Sun's provision (in F2Q13 - Rs5.8bn). We estimate this could negatively affect our earnings estimate by 3-4%. As well, in view of the limited surplus cash available at Sun (US$250mn), the acquisition premium in the stock could moderate for a few months. In our view, this cash erosion could raise the prospects of fund raising by the company. In our view, this cash erosion could raise the prospects of (debt/equity) fund raising by the company. In Oct-12, the Board approved a resolution to raise up to Rs80bn through equity (or equity-linked) instruments.

We reiterate our OW rating on Sun: We expect the company to continue to deliver strong growth over the next couple of years driven by solid business fundamentals. We view the recent stock price correction as an opportunity to buy for mid to longer-term investors.

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CA. Rajesh Desai

[Rajesh Desai]

Sun Pharma (NB Insti)

·         Sun Pharmaceutical Industries (SPIL) 1QFY14 adjusted earnings (for one-time penalty of Rs25.1bn related to generic Protonix) were boosted by a lower tax rate, in what was an otherwise in-line performance at the operating level. Even as Taro’s performance weakened due to competition in its flagship dermatology product, Nystatin combination drug, SPIL continued to get a boost from its large US pipeline as well as through price hikes of the products with limited competition or in which there is shortage in the US. We have factored in the 180-day marketing exclusivity in respect of the launch of generic Prandin (anti-diabetec drug), a lower tax rate of 15% in line with the management’s guidance and our revised house call on the rupee-US dollar rate of s58.5/Rs57.5/$ for FY14E/FY15E in our numbers, owing to which our FY14/FY15 EPS estimates stand revised upwards by 15%/13%, respectively. We have upgraded the stock to Buy from Hold with a revised target price of Rs589, based on 25xFY15E (from 24x earlier) revised EPS of Rs23.6 (from Rs21.6 earlier).

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CA. Rajesh Desai

[Rajesh Desai]

Sun Pharmaceutical Industries - Sharekhan
Recommendation: Buy
Price target: Rs595
Current market price: Rs541

Newly acquired US entities fuel growth

Result highlights 

• Q1FY2014 results better than expected; one-time charge erodes bottom line: Sun Pharmaceuticals Industries (Sun Pharma) reported an impressive 31% year-on-year (Y-o-Y) rise in the net sales to Rs3,482.2 crore in Q1FY2014, mainly due to consolidation of the newly acquired entities like DUSA Pharmaceuticals (DUSA Pharma) and the generic arm URL Pharma in the US market. The consolidation also helped maintain a healthy operating profit margin (OPM) of 44% (though it declined by 182 basis point YoY from a high base) during the quarter. This level of OPM was achieved despite its US subsidiary Taro Pharmaceutical Industries (Taro Pharma) reporting a pricing pressure in key products and consolidation of the newly acquired entities leading to a rise in the employee costs. A turnaround in other income and a lower effective tax rate further boosted the profit line during the quarter. However, a one-time charge of Rs2,517.4 crore related to a patent settlement case on Protonix led to a decline in the bottom line with a net loss of Rs1,276.1 crore. However, excluding the one-time charge, the adjusted net profit grew by 56% YoY to Rs1,241.3 crore (vs our estimate of Rs923 crore for the quarter).

• Taro Pharma records one-time blips; expect better days ahead: During the quarter, Taro Pharma, Sun Pharma's 66.3% US subsidiary, reported a 3.7% year-on-year (Y-o-Y) decline in revenues to $153.2 million in Q1FY2014 while its net profit dropped by 6.5% YoY to $58.8 million, mainly due to (a) competition-led price erosion in its flagship product nystatin/triamcinolone combination; and (b) one-time charge related to price adjustments on contractual obligations. Excluding the one-time charge, the underlying revenue growth would be at 10% YoY. Though competition is likely to continue in key products, Taro Pharma would witness a better growth on launch of new products.

• Outlook remains strong; we maintain our estimates, price target and recommendations: We find most of the growth elements intact during the quarter, with a positive surprise on contributions from the newly acquired entities in the USA (which not only made up the revenue loss from Taro Pharma but also helped maintain a healthy margin). However, given the uncertainty in currency movements and implications of the new pricing policy in India, we prefer to maintain our estimates for FY2014 and FY2015. We have Buy recommendation on the stock with a price target of Rs595 (adjusted for bonus shares), which implies 26x estimated earnings for FY2015.

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CA. Rajesh Desai