Emkay Global Financial has given Hold recommendation for Sun Pharma with a target price of Rs. 775 in its research report issued on Jan 10, 2022

Emkay Global Financial’s report on Sun Pharma

We believe that the recent run-up in Sun Pharma stock due to the good traction for the Winlevi launch is an over-reaction to a typical launch strategy of having a Patient Assistance Program (PAP). A careful analysis of Winlevi prescriptions (Rx) suggests that two-thirds of the Rx come via the PAP. The company is offering a coupon card that limits out-of-pocket (OOP) cost for patients to as low as ~US$25/month. The patient can use the card for as long as 12 months, with total benefits of US$7,231 for 14 tubes. Based on this, we believe the revenue realization for PAP Rx would be very low. PAP is a typical launch strategy used by pharma companies to garner insurance (formulary) coverage. However, literature indicates PAPs rarely drive higher insurance coverage. This is something we have already witnessed with multiple drugs (e.g., Absorica). Hence, we believe total Rx, excluding PAP Rx, is a true reflection of the underlying demand, and we will monitor it to assess Winlevi’s potential.

Outlook

For now, we maintain our below-Street expectation for Winlevi peak sales at ~US$60mn, based on: 1) Rx trend, excluding PAP, 2) efficacy profile and 3) competitive landscape. We maintain our Hold rating on Sun with a TP of Rs775.

More Info on Trent

At 16:00 hrs Sun Pharmaceutical Industries was quoting at Rs 831.90, up Rs 5.45, or 0.66 percent.

It has touched an intraday high of Rs 841.45 and an intraday low of Rs 827.85.

It was trading with volumes of 68,890 shares, compared to its thirty day average of 172,393 shares, a decrease of -60.04 percent.

In the previous trading session, the share closed down 0.28 percent or Rs 2.35 at Rs 826.45.

The share touched its 52-week high Rs 860.00 and 52-week low Rs 550.70 on 03 January, 2022 and 28 January, 2021, respectively.

Currently, it is trading 3.27 percent below its 52-week high and 51.06 percent above its 52-week low.

Market capitalisation stands at Rs 199,600.68 crore.

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