Sun Pharma’s Leqselvi Launch Blocked By US Court

Sun Pharmaceuticals Ltd. announced on Saturday that the US District Court of New Jersey has granted a preliminary injunction preventing it from launching its new drug, Leqselvi, until further legal developments or the expiry of the patent at the center of the lawsuit. 

This legal action, filed by Sun Pharma on August 1, sought to challenge the injunction, but the court decided on Friday to uphold the delay, effectively halting the drug's release in the U.S. market.

In response, Sun Pharma stated, “We respectfully disagree with and intend to immediately appeal this decision,” in an exchange filing on Saturday. This ruling requires the company to defer any Leqselvi launch until a favourable court outcome or the patent's expiration, whichever occurs first.

Q2 Earnings Snapshot

On October 28, Sun Pharma reported its financial performance for the quarter ended September 30, meeting analysts' projections. The drugmaker posted a consolidated net profit of Rs 3,040 crore, marking a 27.94% increase from the previous year and closely aligning with Bloomberg's consensus estimate of Rs 2,932 crore. The profit growth was driven by lower-than-expected research and development expenses and growth in the U.S. market.

Sun Pharma's R&D investments for Q2 FY25 amounted to Rs 792 crore, accounting for 6% of sales. This spending level is consistent with the company's focus on innovation, despite the recent injunction setback in the U.S.

• Revenue up 9.01% to Rs 13,291.4 crore (Bloomberg estimate: Rs 13,321 crore).

• Ebitda up 32.2% to Rs 3,939 crore (Estimate: Rs 3,753 crore).

• Margin at 29.63% versus 24.43% (Estimate: 28.2%).

• Net profit up 27.94% to Rs 3,040 crore (Estimate: Rs 2,932 crore).

Shares of the company last closed 0.51% higher at Rs 1,858.40 per share, compared to a 0.39% advance in the NSE Nifty 50. The stock has risen 64.05% year-to-date and 47.56% over the past 12 months.

Thirty out of the 41 analysts tracking the company have a 'buy' rating on the stock, seven recommend a 'hold' and four suggest a 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential upside of 9.4%.