Sun Pharmaceutical

The National Company Law Tribunal (NCLT) has approved the merger of Sun Pharmaceutical Medicare and other units with Sun Pharma. The approval allows these subsidiary entities to be consolidated into the main company structure.

The US government imposed a 100% tariff on imported patented drugs starting October 1, which could significantly impact Sun Pharmaceutical Industries. The tariff excludes companies with US manufacturing plants and does not apply to generic medicines. Sun Pharma has substantial exposure with patented drugs accounting for 17% of revenue in FY25, totaling $1,217 million in consolidated sales, with 85-90% coming from the US market. HSBC estimates the tariff could reduce Sun Pharma's earnings by 8-10% in FY26 and FY27 in a worst-case scenario. The company's patented portfolio is expected to grow from 17% of revenue in FY25 to 22% by FY28, with key products including Ilumya, Cequa, Winlevi, and Leqselvi. Sun Pharma currently uses global contract manufacturers, with Ilumya manufactured in South Korea and Europe. The company has over $3 billion in cash as of June 2025, providing flexibility to relocate production to US facilities, though this could take 6-24 months and involve substantial costs. HSBC maintains a 'Buy' rating with a target price of Rs 1,850. Sun Pharma shares closed at Rs 1,585, down 2.6%, and are down 16% year-to-date.

US President Donald Trump announced 100% tariffs on branded and patented drugs imported into the US, effective October 1. The tariffs exempt companies with existing US plants, those building US facilities, or those who have broken ground for construction. Sun Pharma's specialty products including Illumya, Cequa, Odomozo, and Winlevi represent 19.3% of overall sales. The company's specialty sales reached $1.2 billion with 17% growth, while global Illumya sales grew 17% to $681 million. Sun Pharma does not disclose US plant sales figures but management indicated current capacity is sufficient for onshore manufacturing without additional investment. Investment analyst Aditya Khemka from InCred Asset Management noted potential impact on Sun Pharma and Wockhardt, with possible risks for Biocon if biosimilars are included. The Nifty Pharma index declined 2% over the past month, with some pharma stocks falling up to 6%. Sun Pharma shares closed unchanged at ₹1,625, gaining 1.5% over the month.