Shares of Sun Pharmaceutical Industries Ltd. plummeted by up to 5% on 4 November after a ruling by the US District Court of New Jersey delayed the launch of its hair loss medication, Leqselvi. The court granted a preliminary injunction to US-based Incyte Corporation, which filed a patent infringement case against Sun Pharma. This ruling halts Sun Pharma's plans to bring Leqselvi to the market, a setback that affected investor sentiment, pushing shares down to ₹1,799.45 on the NSE as of 09:53 am.
The court ruling and its impact on Leqselvi's launch
The recent court decision blocks Sun Pharma from launching Leqselvi until a ruling favours the company or the patent in question expires in December 2026. Leqselvi, designed to treat severe alopecia areata, was projected to generate $200 million in sales within the next few years and was anticipated to strengthen Sun Pharma's growth in the US market. Analysts noted that the injunction could prompt Sun Pharma to negotiate a royalty-based settlement with Incyte, which could ease market entry for the drug sooner than the patent expiry.
Analyst views on Sun Pharma's prospects
Sun Pharma's decision to appeal against the ruling underscores its strategic commitment to launch Leqselvi, but the outcome remains uncertain. According to Emkay Institutional Equities, a settlement might still be the most feasible solution, albeit one that could impact Leqselvi's net present value (NPV) due to potential royalty payments. If a settlement fails, Sun Pharma might have to wait until December 2026 to enter the market.
Brokerage firm Nomura forecasts different outcomes, with a potential Leqselvi launch in FY25. Nomura anticipates the drug could yield revenues of $10 million, $80 million, and $150 million in FY25, FY26, and FY27, respectively, depending on the court decision. They estimate the earnings impact from Leqselvi at 0.4%, 3.1%, and 5.2% for these years, assuming Sun Pharma can proceed in FY25.
How to buy shares online amid market fluctuations?
The Leqselvi setback brings uncertainty but also opportunities for investors considering Sun Pharma in their portfolios. For those looking to buy shares online, the recent dip could present an entry point if they believe in the company's long-term growth prospects. Sun Pharma's robust earnings, alongside a 28% year-on-year growth in net profit to ₹3,040 crore, illustrate its strong market presence, particularly in the US. The company also reported a 9% rise in consolidated revenue to ₹13,291 crore for the July-September quarter, further bolstering its position.
To buy shares online, investors should monitor Sun Pharma's performance and any updates on the Leqselvi case. With its established market foundation, Sun Pharma could remain resilient, and a favourable outcome could further fuel growth.
Investor outlook and next steps for Sun Pharma
In the worst-case scenario, Leqselvi's launch might be delayed until December 2026, impacting Sun Pharma's earnings and sentiment in the near term. This could influence brokerage forecasts, with some analysts already revising estimates for the drugmaker due to uncertainties surrounding the Leqselvi rollout. However, Sun Pharma's recent performance has been robust, which may still appeal to investors looking to buy shares online despite the recent setback.
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