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Stars aligning well

Ilumya milestone and Taro help Q3

Sun Pharma (SUNP IN) Q3FY24 EBITDA came in 8% ahead of our estimates,  driven by better margin in the Taro subsidiary and USD 20mn milestone income from the Ilumya partnership. The rest of the business came in line with our expectations. The quarter had little contribution from gRevlimid; we expect the next large chunk from the product in Q4.

Robust growth continues in the specialty business

Revenue for the global specialty business grew 18% YoY to USD 277mn, excluding the one-off milestone of USD 20mn. We expect robust growth to continue, led primarily by Ilumya, Winlevi and Cequa. We expect Deuruxolitinib filed recently for alopecia areata to add to this momentum in H2FY25. This could become a USD 200mn product in the next 3-4 years. With the deal on Taro delisting getting closer, we also expect the US generics business to gather momentum.

Growth remains strong in the India business 

Growth for the India business picked up pace in Q2 after five quarters of lackluster performance and sustained momentum in Q3 – the business grew 11% YoY in both quarters. We expect high single-digit growth to sustain in this business.

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