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Sun Pharmaceutical Industries Ltd’s increasing scale of its specialty portfolio in the US market seems to have improved investor sentiment, especially when its peers are struggling for growth there. The firm has been banking on its unfolded speciality portfolio in the US to support growth and thus offset some of the pricing pressure in the US generics base business.

The rebound in the acute portfolio and the resilience of its chronic drugs has in general kept the firm’s outlook upbeat. “The superior execution of the speciality portfolio, outperformance in domestic formulation, and the low base of 2QFY21 are expected to drive 8% year-on-year (y-o-y) growth in earnings for Sun Pharma," analysts at Motilal Oswal Financial Services wrote in a note.

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During Q1, speciality products such as Illumya, Cequa and Absorica LD had supported growth in the segment. The firm had recorded 35% y-o-y and 3% sequential growth in US sales in constant currency terms during Q1. Prescription flow has increased with rising footfalls at clinics and hospitals after covid-19 restrictions were eased. During Q2, the weekly prescription volume run rate of Cequa had increased 4%, showed Nirmal Bang Institutional Equities data. Illumya’s weekly average prescription volume in this quarter was up 3% compared to Q1.

US sales are likely to grow 15% y-o-y with the ramp-up in Ilumya sales and stabilization of the Taro portfolio, analysts at Motilal Oswal Financial Services said.

Those at Phillip Capital Research said that speciality and Taro businesses, accounting for over 60% of Sun’s overall US sales, are set for a sequential profitable growth. This may ease concerns over price erosion going ahead. This, along with incremental high margin contribution of $290 million from generic Revlimid in FY23, will drive earnings of Sun further.

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