Shares of Sun Pharmaceutical Industries experienced a notable drop of five per cent, settling at Rs 1,766.15 during early trading on the Bombay Stock Exchange (BSE) this Monday. This decline followed a significant ruling from the U.S. District Court of New Jersey, which temporarily blocked the company from launching its new hair loss treatment, Leqselvi, in the United States. The court’s preliminary injunction prohibits the drug’s release until either a forthcoming ruling is issued or the contested patent expires, scheduled for December 2026. In response to this legal setback, Sun Pharma has declared its intention to appeal the decision while also exploring potential out-of-court settlements to expedite the product’s availability.
Impact on financial projections and sentiment
During Sun Pharma’s recent Q2 earnings call, executives outlined contingency plans to mitigate the financial impact of potential legal challenges, including exploring a settlement that could materialize before the patent expiration. The injunction on Leqselvi’s launch is expected to affect anticipated earnings from the drug, which had been projected to generate over $200 million in peak revenue within four years of its introduction to the market. Analysts at brokerage firm ICICI Securities have acknowledged the long-term growth potential of Leqselvi but expressed concerns over the short-term market sentiment following the court’s ruling, which is anticipated to adversely influence investor perceptions of Sun Pharma’s stock performance.
Broader business performance and analyst recommendations
Despite these challenges, Sun Pharma’s stock has demonstrated impressive resilience, appreciating by 43 per cent year-to-date, driven by robust growth across its speciality drug portfolio, expansion in emerging markets, and strong domestic sales—an indication of its performance standing independent of the U.S. generics segment. Investment firm UBS continues to advocate for a “Buy” rating on Sun Pharma shares, setting an ambitious target price of Rs 2,450, highlighting the strength of the company’s speciality business model and a tiered royalty structure that mitigates its dependence on generics. Likewise, JPMorgan remains bullish about the growth trajectory of Sun’s speciality portfolio, projecting a remarkable compound annual growth rate (CAGR) of 20 per cent for the division from FY24 to FY27.
**Interview with Dr. Emily Chen, Pharmaceutical Industry Analyst**
**Interviewer:** Good morning, Dr. Chen. Thank you for joining us today to discuss the recent developments surrounding Sun Pharmaceutical Industries and their hair loss treatment, Leqselvi.
**Dr. Chen:** Good morning! It’s a pleasure to be here.
**Interviewer:** So, Sun Pharma’s shares have dropped significantly due to a court ruling that blocks the launch of Leqselvi in the U.S. Can you explain the implications of this ruling?
**Dr. Chen:** Absolutely. The ruling from the U.S. District Court of New Jersey is a considerable setback for Sun Pharma. It has granted a preliminary injunction which effectively prevents them from marketing Leqselvi until a final decision is reached or the patent dispute is resolved—presumably not until December 2026. This delay can severely impact their expected revenue from this product and investor confidence.
**Interviewer:** That sounds concerning for the company. How critical is the Leqselvi product to Sun Pharma’s overall strategy?
**Dr. Chen:** Leqselvi is an important addition to Sun Pharma’s portfolio, particularly as it ventures into the lucrative hair loss treatment market. Having gained FDA approval earlier this year, it was poised to be a key growth driver. The delay could stall their plans for expansion and innovation in this area.
**Interviewer:** What options does Sun Pharma have moving forward?
**Dr. Chen:** Sun Pharma has a couple of avenues to consider. Firstly, they plan to appeal the court’s ruling, which may take time but could eventually lead to a favorable outcome. Secondly, they are exploring out-of-court settlements. Depending on the negotiations, this could accelerate access to the market but may entail giving up certain rights or profits.
**Interviewer:** Given these circumstances, how should investors react?
**Dr. Chen:** Investors need to perform due diligence given the current volatility. While the initial drop in stock price might seem alarming, it also presents a potential buying opportunity for those who believe in Sun Pharma’s long-term prospects. However, it’s crucial to stay informed on the developments of the court case and the company’s strategy moving forward.
**Interviewer:** Thanks for your insights, Dr. Chen. It’s certainly a watch-and-wait situation for everyone involved.
**Dr. Chen:** Thank you for having me! I look forward to seeing how this unfolds.
