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Updated: 08/07/2009 | 12:00 AM IST
Sun Pharma gains on new drug approval
Capital Market
Wednesday, July 08, 2009 (New Delhi)
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The announcement was made before market hours today, 8 July 2009.

Meanwhile, the BSE Sensex was down 281.01 points, or 1.98%, to 13889.44.

On BSE, 5274 shares were traded in the counter as against an average daily volume of 52,192 shares in the past one quarter.

The stock hit a high of Rs 1162 and a low of Rs 1140 so far during the day. The stock had hit a 52-week high of Rs 1600 on 19 May 2009 and a 52-week low of Rs 953 on 4 March 2009.

The stock had underperformed the market over the past one month till 7 July 2009, falling 14.80% as compared to the Sensex's 6.18% decline. It had also underperformed the market in the past one quarter, rising 6.97% as against the Sensex rise of 34.51%.

India's largest drug maker by market capitalisation has an equity capital of Rs 103.56 crore. Face value per share is Rs 5.

The current price of Rs 1154 discounts the company's year ended March 2009 EPS of Rs 61.09, by a PE multiple of 18.89.

Sun Pharmaceuticals Industries (Sun) said in a statement that AstraZeneca had annual sales of Casodex of $314 million in the United States.

Earlier this month, Sun had got tentative approval from the US Food and Drug Administration for marketing the generic version of Optivar.

Optivar is used for treatment of eye itching connected to conjunctivitis. The product has annual sales of approximately $48 million in the US.

Shares of Sun had witnessed a sharp 18.89% slide in four trading sessions to Rs 1090.95 on 30 June 2009, from its recent high of Rs 1345.15 on 24 June 2009 after the US Food and Drug Administration (USFDA) seized generic drugs made by Caraco Pharmaceutical Laboratories, a US subsidiary of Sun Pharma after the agency found manufacturing defects at company plants, including oversized tablets.

After the US drug regulator's stringent action against its US, Sun Pharma soon withdrew its annual sales guidance for the year ending March 2010 (FY 2010). In a conference on Sunday, 28 June 2009, Sun Pharmaceuticals chairman and managing director Dilip Shanghvi said he would revise the revenue guidance for FY 2010 as the company was not sure when its US subsidiary, Caraco Pharmaceuticals, would be able to meet the regulatory standards of the US FDA.

At the time of announcing the fourth quarter results of 2008-09, Sun Pharmaceuticals had said the company was expecting sales growth of 13-15% in FY 2010.

The recent strict action by the US regulator against Caraco was on account of a constant failure to meet the FDA's current Good Manufacturing Practice requirements, which assure the quality of manufactured drugs.

It may be recalled that the US FDA had warned Sun Pharma about manufacturing problems in October 2008. FDA inspectors found oversized tablets, poor control of raw materials, higher- than-normal variability in tablet manufacturing processes and poor decisions made by the company's management who are responsible for the quality of drugs being manufactured.

Sun Pharmaceuticals Industries' net profit rose 71.3% to Rs 424.69 on a 32.4% gain in sales to Rs 770.35 crore in Q4 March 2009 over Q4 March 2008.

Sun Pharma is an international, integrated, speciality pharmaceutical company. It manufactures and markets a large basket of pharmaceutical formulations as branded generics as well as generics in India, US and several markets across the world.

Promoters of Sun Pharma have pledged 7.85 lakh shares, or 0.38% equity of the company with lenders. The total promoter holding in the company is 63.71% (as on March 2009).

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