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BW Businessworld

Sun Pharma Hit; US Cancer Drug Supply Contact May End

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Shares in Sun Pharmaceutical Industries fall 1.6 per cent on worries the drug maker will soon see an end to its temporary arrangement to supply a cancer drug in the US. Janssen Biotech, a unit of Johnson & Johnson's, said on 15 October it would resume supplies of 20 mg dosages of Doxil, which treats ovarian and other cancers. The US healthcare firm had suspended supplies following the manufacturing disruption from a third party supplier.

Sun Pharma had been supplying an alternative version of Doxil called Lipodox in the US under a temporary arrangement with the Food and Drug Administration. Brokerage Edelweiss estimates Sun's US sales of Lipodox had reached around $110-120 million, with 90-95 per cent EBITDA margins, during the temporary period.

"Though this opportunity was short term and the resumption was anticipated by end 2012, the timing of the same was uncertain. Nevertheless, this ends a lucrative short term opportunity for Sun," Edelweiss said in a e-mail to clients. Sun Pharma declined to comment.