Notwithstanding the challenges it faced due to COVID-19 pandemic, Sun Pharma’s Specialty business witnessed decent growth during FY21. Registering more than 10% annual growth in the segment, the company garnered US $473 million during the year as compared to US $429 million in FY20. Going forward, it is confident to grow at 21% CAGR in the United States market over the next two years. 

The company’s indication for moderate-to-severe plaque psoriasis, Ilumya, recorded global sales of US $147 million (+51% YoY) in FY21. While it remains hopeful on additional indications for psoriasis arthritis, trials got delayed due to availability issues related to subject enrolments and clinical sites. 

For the US generics market, Sun Pharma has 94 pending abbreviated new drug applications (ANDAs) and 9 new drug applications (NDAs) in the pipeline. In FY21, it launched 18 products (including re-launches) and some supply benefits for products under shortage. With bumper launches, the company sees a steady performance in the US and is hopeful of gradual normalization in the market post the scale-up in vaccination. 

Sun is expecting better traction for its dry eye disease medication, Cequa in FY22 after quick ramp-up post launch. It was launched in US in October 2019. The company’s drug for the treatment of severe recalcitrant nodular acne, Absorica has seen generic competition with launch by Teva Pharmaceuticals in April, 2021. In response, the company launched its own authorized generic, Absorica LD capsules in the US market in February, 2020. 

Despite generic entry in Absorica, Sun expects to grow the business, led by ramp-up in Ilumya, Cequa and its prostate cancer drug, Yonsa. While Ilumya, Cequa and Absorica reached pre-Covid levels, its cancer therapeutic drug, Levulan is yet to see normalized sales due to slower pick-up in elective surgeries in hospitals. The company has plans to enter biosimilars 3rd wave products, an opportunity that goes beyond 2028. 

The company also expects its subsidiary, Taro Pharma to see growth recovery on expectation of stabilization in the US derma market.

Sun Pharma’s global presence is supported by manufacturing facilities spread across 6 continents and approved by multiple regulatory agencies. It is supported by strong research and development capabilities with investments of approximately 6% of annual revenues in R&D. Company’s Specialty R&D spend was at 32% of total R&D spend during FY21. With 8-9% of sales, the share of specialty R&D is set to increase in FY22. 

Bright Outlook

Among the Indian pharmaceutical companies operating in the US, Sun Pharma enjoys a unique positioning, with capabilities for on-shore and off-shore integrated manufacturing for the US. The company has displayed enough appetite to maintain leadership in existing markets through focus on innovative solutions and thus enhance presence in high growth markets. Its growth in the US market over the last 2 decades has been driven by a mix of organic and inorganic initiatives. 

The growing demand of specialty medicines has been a steady growth driver for Sun Pharma in the developed markets such as the US. The company offers a comprehensive portfolio across therapies tailored to the US market, which accounts for 33% of the company’s revenues. The company’s key focus areas comprise Central Nervous System (CNS), dermatology, cardiology, oncology and ophthalmic, among others. It is ranked 2nd by prescriptions in the US dermatology market. 

In ten years, from 2009 to 2019, the contribution of specialty products to global pharma spending has increased from 21% to 36%. In the developed markets, contributions increased from 23% to 44% and are likely to account for 40% of global spending by 2024. With the fastest growth expected to be in the developed markets, the contribution of specialty is likely to cross 50% by 2024. Given the higher pricing, the majority of these products’ uptake is likely to be in markets with robust reimbursement systems such as the United States.

While the company has refrained from giving growth outlook for FY22 given uncertainty related to COVID, it appears to be well placed to see growth across business segments despite the challenging environment. In FY22, the company aims to enhance share of its specialty business besides continuing to focus on complex generics and high entry barrier segments. It is working to ensure broad product offering to customers across multiple dosage forms and invest to further build the specialty pipeline. In keeping with 24x7 compliance to cGMP, the company is continuously enhancing systems, processes, and human capabilities to ensure compliance with global regulatory standards.