Sun Pharma's US Innovative Drug Sales Surpass Generics for First Time

Sun Pharmaceutical Industries Limited reported a significant achievement in the second quarter of the financial year 2026 (Q2 FY26) where its sales from innovative medicines in the United States exceeded its sales from generic drugs for the first time. This milestone was primarily propelled by strong performance from its key innovative products: Ilumya (for psoriasis), Cequa (an ophthalmic product), and Odomzo (a skin cancer drug). The recent launch of Leqselvi, a novel drug for alopecia (hair loss), in the U.S. in July also contributed, following Sun Pharma's acquisition of Concert Pharma for over ₹4,800 crore. Richard Ascroft, CEO of Sun Pharma's North American business, noted an encouraging response to Leqselvi and expressed optimism for continued access and sales growth. Ascroft anticipates further increases in innovative medicine sales in Q3 and Q4 of FY26, especially with the planned launch of Unloxcyt, a cancer immunotherapy drug. Sun Pharma is awaiting the U.S. Food and Drug Administration's (FDA) decision on updated labeling for Unloxcyt and is on track for its H2 FY26 launch. Global innovative medicine sales reached $333 million in Q2 FY26, a 16.4% increase year-on-year, accounting for 20.2% of total consolidated sales. However, overall formulation sales in the U.S. declined by 4% to $496 million in the quarter, mainly due to a drop in the generics segment. U.S. sales constituted approximately 30.1% of Sun Pharma's total consolidated sales. The company reported consolidated sales of ₹14,405.20 crore for Q2 FY26, an 8.6% increase year-on-year, with a net profit of ₹3,118.0 crore, up 2.6%. R&D investment was ₹782.70 crore (5.4% of sales). Sun Pharma is also on track to be among the first wave of companies to launch generic semaglutide in India once Novo Nordisk's patent expires in March, as stated by Managing Director Kirti Ganorkar. Regarding the biosimilars space, Executive Chairman Dilip Shanghvi indicated the company is studying FDA guidelines and awaiting clearer guidance before making investment decisions, acknowledging the potential for reduced investment but also future competition.

Heading: Impact This shift signals Sun Pharma's successful transition towards a more profitable, innovation-driven business model in its largest market. It demonstrates the company's R&D capabilities and strategic acquisitions. The continued investment in innovative drugs is crucial for its long-term growth and may lead to higher valuations. The performance in the US, a major global market, will significantly influence investor sentiment towards the company and the Indian pharmaceutical sector's global competitiveness. Impact Rating: 8/10

Heading: Difficult Terms Generics: Medicines that are identical or bioequivalent to a brand-name drug in dosage form, safety, strength, route of administration, quality, performance characteristics, and intended use. They are typically much cheaper than brand-name drugs. Innovative Medicines: Also known as branded or new drugs, these are patented medications developed through extensive research and development, offering novel therapeutic benefits. Alopecia: A medical term for hair loss. Ophthalmic Product: A medication or device intended for use in the eye. Skin Cancer Drug: Medication used to treat malignant tumors originating in the skin. Immunotherapy: A type of cancer treatment that uses the body's own immune system to fight cancer. EBITDA: Earnings Before Interest, Taxes, Depreciation, and Amortization. It is a measure of a company's operating performance. EBITDA Margin: EBITDA divided by total revenue, expressed as a percentage. It indicates profitability from operations. Biosimilars: Similar to generics for biological drugs, biosimilars are highly similar to approved biological medicines (reference products) and have no clinically meaningful differences in terms of safety, purity, and potency. FDA: U.S. Food and Drug Administration. The federal agency responsible for protecting public health by ensuring the safety, efficacy, and security of human and veterinary drugs, biological products, medical devices, and food supply.