Sun Pharmaceutical Industries Ltd. expects low double-digit percentage growth in revenue for fiscal 2019, helped by the launch of several specialty drugs and potential regulatory clearance for its Halol plant.
"This is despite our assumption that the U.S. generic market will continue to be competitive," Dilip Shanghvi, Sun Pharmaceutical's managing director, said on the company's fourth-quarter earnings call.
India's biggest drugmaker said the U.S. generic pricing pressure drove down full-year sales for the company's U.S. business by 34% year over year to $1.36 billion, with no expectation for improvement in fiscal 2019.
"I think the direction is not going to change for the better in the near term. That is the clear sense that I have," Abhay Gandhi, CEO of company's North America business, said on the call.
The company is expecting to book higher sales in fiscal 2019 with the launch of three new medicines — prostate cancer drug Yonsa, skin disorder therapy Ilumya and dry eye treatment Seciera.
Yonsa and Ilumya have already gained U.S. FDA approval and Seciera is currently undergoing regulatory review.
The Mumbai, India-based company said its research and development expenses will increase in fiscal 2019 due to investments in specialty business. Gandhi said the company also expects to incur a "significant cost" for commercializing the specialty products, which refers to more complex, higher cost medicines often delivered via infusion or injection.
Shanghvi deemed the specialty business a "new engine of growth," adding that the company wants the business to become as meaningful as some of its other larger businesses in the future.
With a growing expense in specialty, the company is looking to rationalize its generic R&D spend as the competitive generic market in the U.S have made many of its R&D projects unviable.
Shanghvi also talked about the expected regulatory clearance for its Halol plant, which has repeatedly failed to pass FDA inspections and the latest regulatory rejection in February has left investors unhappy.
"I agree with some of your unhappiness. As a large investor, I'm also unhappy and we're trying to find a way to get the plant recertified at the earliest. It's taking much longer than what we would have liked," Shanghvi said on the conference call.
Shanghvi said the second quarter of fiscal 2019 is the last date for the response to the FDA and Gandhi believes the plant will not require a re-inspection.
