Sun Pharmaceutical Industries Limited (NES:SUNPHARMA) including its subsidiaries and associates (Sun Pharma) is the fourth largest global specialty generic company that is ranked No. 1 in India and No. 8 in the US. It is the largest Indian pharmaceutical company in the US and among the leading Indian pharmaceutical companies in emerging markets.

Sun Pharma enjoys a vertically integrated business, economies of scale and good talent management practices that enable it to deliver quality products at affordable prices. The Company is deepening its global footprint as a highly trusted manufacturer of specialty products, branded generics, complex and pure generics, OTC products, anti-retrovirals (ARVs) and APIs

It is expanding its footprint among consumers and healthcare professionals in 100+ countries, and offers a portfolio of 2,000+ products, globally, in a full range of dosage forms. This includes tablets, capsules, injectables, ointments, creams and liquids, nasal sprays and hormones, among others.

Sun Pharma has 44 manufacturing sites approved by global health regulatory agencies—supported by a worldwide supply chain—and multiple research and development (R&D) facilities across the world, investing 6.9% of its sales in R&D. It has a diverse employee base of 32,000+ individuals across 50 nationalities worldwide.


Business Overview

Research & Development

e were pioneers among Indian pharmaceutical companies to see tremendous value in investing in research & development (R&D). The company's early investments in R&D, beginning three decades ago, enabled it to make technology its key differentiator and develop a basket of robust products for diverse markets across the world. The company's core strength lies in its ability to excel in developing generics and technologically complex products through focused teams in formulations, process chemistry and analytical development. Sun Pharmaceutical has the capability to deliver quality products within established timelines, at low costs and without compromising on quality.1

Sun Pharmaceutical has around 2000 research scientists working in multiple R&D centres equipped with cutting-edge enabling technologies for research. The company's scientists have expertise in developing generics, difficult to make technology intensive products, Active Pharmaceutical Ingredients (APIs), Novel Drug Delivery Systems (NDDS) and New Chemical Entities (NCEs).

The company's capabilities span the development of differentiated products, such as liposomal products, inhalers, lyophilised injections, nasal sprays, besides developing controlled release dosage forms.

The company's knowledge in pharmaceutical research allows a rapid ramp-up of a diverse range of immediate and Novel Delivery Systems spanning Oral, Parenteral, Topical and Inhalation Dosage Forms. The company's formulation expertise lies in the areas of taste masking, spray-drying, drug-layering, nano-milling, lyophilisation and other pharmaceutical unit operations that enable it to cater to various formulation design needs and concepts. The ability to develop difficult-to-make, complex APIs by using the latest technologies is the key differentiating factor of its research.

The company's scientists work closely with its business development team to generate innovative concepts and ideas, exploiting both market needs and synergies across therapeutic areas. The company invest around 7-8 per cent of its revenues annually in research. Even as the company focus on developing new technologies, the company continuously monitor research efficiency. The company's R&D productivity ranks among the highest for Indian generic companies.

Over the years, Sun Pharmaceutical has developed expertise and gathered experience in performing pharmacokinetic and bioequivalence studies to facilitate the introduction of generic or branded generic drugs into the international market. Facilities include a full-fledged site for Phase I clinical studies. The company's facilities have been audited by US FDA, ANVISA, MHRA, and DCGI among others.

The company's research strategy and implementation are well supported by a strong intellectual property team having expertise and experience in chemistry, analytical techniques, dosage forms and global patent law. Over the last 10 years, Sun Pharmaceutical has been consistently successful in challenging patents on several high-value products in the US with First-to-File exclusivity under Hatch-Waxman Act and thus helped bring cheaper, high-quality generic versions of such products to the market much earlier than otherwise possible.

The company's research capability has not only paid it rich dividends in terms of business, but also earned for it an enviable reputation for quality and capability. The most striking proof of this came when the US FDA permitted it to import unapproved Liposomal Doxorubicin. Sun Pharmaceutical is also amongst the very few generic companies that have products like Azelastine Nasal Spray and Sumatriptan Autoinjector in the US and Europe.

The company's R&D centres have been audited and approved by international regulatory authorities, including the US FDA and European authorities.



Sun Pharmaceutical has ensured world-class quality in design, equipment and operations in all its manufacturing facilities across the world. Sun Pharmaceutical has over 40 ( API & finished dose) state-of-the-art manufacturing sites spanning 6 continents. These manufacturing units are located in India, the US, Brazil, Canada, Egypt, Hungary, Israel, Bangladesh, Mexico, Romania, Ireland, Morocco, Nigeria, South Africa and Malaysia. The company's units ensure that Sun Pharmaceutical is able to provide best-in-class products to patients across 150 countries worldwide.2

The company's manufacturing operations are focused on producing generics, branded generics, speciality, over-the-counter (OTC) products, anti-retrovirals (ARVs), Active Pharmaceutical Ingredients (APIs) and intermediates in the full range of dosage forms, including tablets, capsules, injectables, ointments, creams and liquids. The company also manufacture speciality APIs, including controlled substances, steroids, peptides and anti-cancers.

Sun Pharmaceutical has a highly skilled team of regulatory affairs specialists who are well versed with regulatory policies and procedures around the world. They have a wealth of experience in the timely filing of dossiers as well as handling regulatory queries from both authorities and customers.

A wide range of regulatory agencies routinely conduct stringent audits of its manufacturing facilities for compliance with Current Good Manufacturing Practices (cGMP). Several regulatory agencies, including FDA-USA, EMA-Europe, MHRA-UK, MCC-South Africa, TGA-Australia, ANVISA-Brazil, WHO-Geneva, BfArM-Germany, KFDA-Korea and PMDA-Japan, have inspected its facilities.

Global Quality

The company's global Quality Management Team ensures that every product manufactured and distributed by it complies with all internationally accepted good practices and standards of quality, purity, efficacy and safety.3

To maintain quality standards, every plant has well defined procedures and systems in place in compliance with the requirements of the Current Good Manufacturing Practices (cGMP), WHO, PIC’s and EU GMP in order to ensure that its operating procedures meet the very exacting standards of regulators like the US FDA, EMA, HC, WHO and TGA, among others.

Each site has well trained personnel for quality control along with a regulatory affairs department ensuring strict adherence to quality systems and procedures. The teams are guided by a Corporate Quality Unit (CQU). CQU ensures that the latest updates in GMP are being translated into guidelines, standard operating procedures (SOPs) and protocols. The teams ensure that these guidelines are implemented to deliver quality products time after time. In addition, the manufacturing plants are audited by an autonomous Corporate Compliance Department with a view to ensuring 24 x 7 compliance and conformance.

The company's unwavering commitment to quality goes beyond itself . The company insist that its business partners comply with national and international regulatory and business standards which are in alignment with those of its own. The company's own quality standards are constantly benchmarked against global best practices. This means that these are constantly upgraded to keep pace with the evolving dynamics of the global environment.

The company remain committed to the highest levels of quality and will ensure that all its facilities, offices and legal entities continue to meet the exemplary standards that are expected of a global pharmaceutical company.

Industry Overview

Global pharmaceutical industry

Global spending on medicines crossed US$ 1.2 Trillion in 2018; and is projected to grow at a compound annual growth rate (CAGR) of 3-6% in the next five years, reaching over US$ 1.5 Trillion by 2023. Growth in the global pharmaceutical market will continue to be led by the US and pharmerging markets.4

While new product launches, especially specialty products, will be the key growth catalyst in developed markets, pharmerging market expansion will be driven by multiple factors. These factors comprise improving per capita income, increasing healthcare awareness, ageing population and rising incidence of chronic ailments. The product mix in the developed world will continue to shift towards specialty and orphan products. Emerging technologies are enabling healthcare providers to innovate and engage better with key stakeholders.

Developed markets

Growth in global pharmaceutical spending through 2023 will primarily be driven by developed markets and the accelerated adoption of new innovative products. Spending on medicines in developed markets is estimated to grow at 3-6% CAGR from US$ 800 Billion in 2018 to US$ 990-1,020 Billion in 2023. The US will continue to be an important contributor, with its medicine spending expected to remain higher that of the top five European economies.

All developed countries will show moderation in growth through 2023, as compared to the 2014-18 period. Specifically in the US, the positive impact of new specialty launches will be partly moderated by loss of patent protection on older products.


The US pharmaceutical market is set to exceed US$ 600 Billion by 2023. The key driver of this trend will be launch of new specialty products which will be partly offset by patent expiries, growth of biosimilars and slower rate of rise in new launch prices. There has been significant attention given to the launch prices of recently introduced drugs, especially given the shift in innovation towards specialty, orphan and oncology areas (that are often costlier).

Western Europe

The CAGR for the top five developed markets in Western Europe is likely to reduce to 1-4%, with overall spending expected to cross US$ 200 Billion in 2023. Government-led cost controls and decelerated growth in spend on new products will contribute to the slowing in pace vis-à-vis the 4.7% CAGR between 2014 and 2018, that was helped by spending on new products (especially oncology and viral hepatitis treatments).


Spending in Japan amounted to US$ 86 Billion in 2018, but over the next five years, spending on medicines is expected to continue to decline. This is largely due to the continued uptake of generics, despite higher spending on specialty products and an ageing population.

The government of Japan in 2014 set out a policy to achieve a rate of 80% of prescription volume of unbranded generics in the non-patented market by 2021. The resulting savings from generics is enabling a greater shift to specialty medicines without an overall increase in the country’s healthcare budget. Share of specialty spending in Japan is expected to rise from approximately 30% in 2018 to 41% in 2023.

Indian pharmaceutical market

India enjoys a key position in the global pharmaceutical industry. The country is the world’s largest supplier of generics, accounting for 20% of global exports. It supplies over 50% of global demand for various vaccines and 40% of the demand for generic products in the US. The domestic pharmaceutical market contributes to ~2% of the global industry in value and ~10% in volume terms. The domestic pharmaceutical industry has received foreign direct investment (FDI) worth ~US$ 16 Billion on a cumulative basis, between April 2000 and June 2018.

India’s pharmaceutical spending is predicted to grow at 8-11% CAGR in the 2019-23 period to reach a size of US$ 28-32 Billion. A part of this growth will depend on the ability of companies to align their product portfolio towards therapies for chronic diseases that are on the rise.

Specialty medicines

Specialty medicines refer to those used in the treatment of chronic, complex or rare diseases and that require advanced scientific research and innovation. Given their significantly higher purchasing power and strong healthcare insurance coverage, developed markets account for a significant share of global spending on specialty products. Specialty represents a small share in pharmerging markets, given the relatively lower purchasing power, and is expected to rise marginally from 13% in 2018 to 14% by 2023. Specialty is expected to represent more than half of newly launched medicines globally over the next five years. A larger use of biomarkers to segment and treat appropriate patients will characterise these launches.

Spending on specialty medicines in developed markets accounted for US$ 336 Billion in 2018 and is estimated to rise to US$ 475-505 Billion in 2023. Specialty share of total spending across top 10 developed countries is likely to rise from 42% in 2018 to 50% in 2023. Almost 74% of this is expected to be led by the five largest specialty therapeutic classes: oncology, autoimmune, immunology, anti-virals and multiple sclerosis. In most developed markets, specialty spend continues to outpace that on other medicines.

Active Pharmaceutical Ingredients (API)

APIs are chemicals and biologically active elements of drugs with a direct impact on cure, mitigation, treatment and prevention of diseases. The worldwide API market is likely to exceed US$ 225 Billion by 2024 – a 6% CAGR for the forecast period.

The market has witnessed growth through the decades, due to an ever-increasing use of medication and biologics for disease management. Other drivers include increasing incidence of chronic ailments, growing volumes of generic drugs worldwide and rising technological advancements in API manufacturing.

Consumer healthcare

Consumer healthcare providers deal with products in wellness, oral health, nutrition, skin health. These include over-the-counter (OTC) drugs. Globally, a large number of acquisitions, mergers and shutdowns has resulted in industry consolidation, with market share being concentrated within the top 10 firms. The Global OTC market was valued at $135 Billion in 2018. Two top markets, the US (US$34 Billion) and China (US$25 Billion) accounted for ~44% of the global market. Vitamins, minerals & supplements and the cough, cold & allergy segments account for more than 50% sales of OTC products globally

There is a global trend towards self-care, self-medication, awareness for wellness and preventive medicine, along with a rise in disposable income, demand for personalised products, acceptance of e-commerce retail and shift to OTC products. This trend is expected to drive the growth of the industry in future.

Financial Highlights

May 27, 2020 Sun Pharmaceutical Industries Ltd reported financials for the fourth quarter & full year ending March 31st, 2020.5

Highlights of Q4FY20 consolidated financials.

  • Sales / Income from operations at Rs. 8,078 crores, a growth of about 15% over same quarter last year.
  • India sales at Rs. 2,365 crores for Q4FY20. Sales for same period last quarter include a one-time impact of approximately Rs. 1,085 crores related to the change in distribution for India business. Adjusted for this impact, India sales have grown 8% YoY for the quarter.
  • US finished dosage sales at US$ 375 million, decline of 15% over same quarter last year. Sales for Q4 last year included a one-time contribution from the special business in US and hence the numbers are not strictly comparable.
  • Emerging Markets sales at US$ 187 million, up by 8% over Q4 last year.
  • Rest of World sales at US$ 155 million, up by 1% over Q4 last year.
  • R&D investments at Rs. 536 crores (6.6% of sales) compared to Rs. 567 crores for Q4FY19.
  • EBITDA at Rs. 1,256 crores, with resulting EBITDA margin of 15.5%. Approximately 50% of the EBITDA margin decline versus Q3FY20 is due to the adverse impact of forex loss in Q4FY20.
  • Adjusted net profit for quarter was at Rs. 660 crores excluding the impact of exceptional items of Rs. 260 crores. Reported net profit for Q4FY20 was at Rs. 400 crores.

Highlights of FY20 consolidated financials

  • Sales / Income from operations at Rs. 32,325 crores, growth of about 13% over same period last year.
  • India sales at Rs. 9,710 crores, up 32% YoY. Excluding the one-time impact mentioned above, the adjusted growth was 15% YoY.
  • US finished dosage sales at US$ 1,487 million, decline of 2% over same period last year.
  • Emerging Markets sales at US$ 776 million, up by 1% over same period last year.
  • Rest of World sales at US$ 638 million, growth of 29% over same period last year. This growth was partly driven by the full year consolidation of Pola Pharma acquisition in Japan.
  • EBITDA at Rs. 6,477 crores up by 9% over same period last year, with resulting EBITDA margin of 20%.
  • Excluding the exceptional items for both FY20 and FY19, net profit for FY20 was at Rs. 4,026 crores, up approximately 4% over FY19. Reported net profit for FY20 was at Rs. 3,765 crores.

COVID-19 Risk Response

The Covid-19 pandemic has resulted in most countries imposing lockdowns on almost all economic activities, temporary bans on travel & transportation, restrictions on people-to-people physical contact and closure of business operations for most of the industries. The pharmaceutical sector, being a supplier of essential items, has been relatively better-off compared to most other industries. Sun Pharma has promptly formed multiple Covid-19 Risk Response Teams under the guidance of senior management to tackle the challenges resulting from the pandemic.

Despite its proactive Covid risk response initiative, the company do estimate some softening of sales in the near term due to the lockdown and stocking up by customers, although it is difficult to quantify the impact as of now. The company's endeavour will be to ensure that Sun Pharmaceutical is least impacted.

India Business – Market Leadership

Sale of branded formulations in India for Q4FY20 was Rs. 2,365 crores, and accounted for about 29% of total consolidated sales. For full year FY20, sales were at 9,710 crores, accounting for about 30% of overall revenues. Adjusted for the one-time impact of approximately Rs. 1,085 crores related to the change in distribution for India business in Q4 last year, the India business has recorded a YoY growth of 8% for Q4 and 15% for full year FY20.

Sun Pharma is ranked No. 1 and holds approximately 8.2% market share in the over Rs. 143,000 crore Indian pharmaceutical market as per AIOCD AWACS MAT March-2020 report. The market share has improved to about 8.4% in Q4FY20.

US Formulations (including Taro)

Sales in the US were US$ 375 million for the quarter, down by 15% over same period last year and accounted for about 34% of total consolidated sales. Sales for Q4 last year included a one-time contribution from the special business in US and hence the numbers are not strictly comparable. For full year FY20 sales were US$ 1,487 million recording a marginal decline of 2% over same period last year.

Taro Performance

Taro posted Q4FY20 sales of US$ 175 million, down 3% over Q4 last year. For the full year FY20, sales were US$ 645 million, down by 4% over same period last year. Taro’s net profit for Q4 was US$ 54 million down by 7% over same period last year and for full year FY20 was US$ 244 million, down by 13% over same period last year.

Emerging Markets

The company's sales in emerging markets were at US$ 187 million for Q4, a growth of 8% over same quarter last year. Overall sales in emerging markets accounted for about 17% of total consolidated sales for the quarter. For full year FY20, sales were US$ 776 million, up by 1% over same period last year.

Rest of World Markets

Formulation sales in Rest of World (ROW) markets excluding US and Emerging Markets were US$ 155 million in Q4FY20, up by 1% over Q4 last year and accounted for approximately 14% of total consolidated sales. For full year FY20, sales were US$ 638 million, up by 29% over same period last year. This growth was partly driven by the full year consolidation of Pola Pharma acquisition in Japan.

Active Pharmaceutical Ingredients (API): Strategic strength

The company's API business imparts benefits of vertical integration and continuity of supply chain for its formulations business. The company continue to increase the API supply for captive consumption for key products. For Q4FY20, external sales of API were at Rs. 483 crores, flat over Q4 last year. For full year FY20, API sales were at Rs. 1,916 crores, up by about 11% over same period last year.

Research – Investing for future

Consolidated R&D investment for Q4FY20 was Rs. 536 crores, or 6.6% of sales as compared to Rs. 567 crores for Q4 last year. For full year FY20, R&D Investment was Rs. 1,974 crores, or 6.1% of sales.

Sun Pharmaceutical has a comprehensive product offering in the US market consisting of approved ANDAs for 483 products while filings for 98 ANDAs await US FDA approval, including 20 tentative approvals. For the quarter, 6 ANDAs were filed and 2 approvals were received. Additionally, the pipeline includes 55 approved NDAs await US FDA approval.

Recent developments

Sun Pharma Consolidated December 2020 Net Sales at Rs 8,836.78 crore, up 8.36% Y-o-Y 6

February 02, 2021; Reported Consolidated quarterly numbers for Sun Pharmaceutical Industries are:

  • Net Sales at Rs 8,836.78 crore in December 2020 up 8.36% from Rs. 8,154.85 crore in December 2019.
  • Quarterly Net Profit at Rs. 1,913.41 crore in December 2020 up 87.7% from Rs. 1,019.38 crore in December 2019.
  • EBITDA stands at Rs. 2,721.09 crore in December 2020 up 38.74% from Rs. 1,961.28 crore in December 2019.
  • Sun Pharma EPS has increased to Rs. 7.72 in December 2020 from Rs. 3.81 in December 2019.


  1. ^ https://sunpharma.com/operations/research-and-development
  2. ^ https://sunpharma.com/operations/manufacturing
  3. ^ https://sunpharma.com/operations/quality
  4. ^ https://sunpharma.com/sites/default/files/annual/Complete%20Annual%20Report.pdf
  5. ^ https://sunpharma.com/sites/default/files/financialpdfs/Press%20Release%20Sun%20Pharma%20Q4%20FY20%20Financial%20Result.pdf
  6. ^ https://www.moneycontrol.com/news/business/earnings/sun-pharma-consolidated-december-2020-net-sales-at-rs-8836-78-crore-up-8-36-y-o-y-6432631.html
Created by Asif Farooqui on 2020/06/22 14:51
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