Sun Pharma's share price dropped by over 5% on the National Stock Exchange (NSE) after the US District Court of New Jersey issued a preliminary injunction against the launch of Leqselvi, a medication used for severe alopecia areata.
This setback is a result of a complaint filed by Incyte Corporation, which has delayed Sun Pharma's entry into the US market for this product. The ruling has significant implications for Sun Pharma, as it is now prohibited from launching Leqselvi in the US.
Financial analysts have provided insights on the potential impact of this ruling. UBS believes that a settlement with Incyte is possible and that the net present value (NPV) of Leqselvi is unlikely to be significantly affected. On the other hand, JPMorgan suggests that Sun Pharma may appeal the court's decision or pursue a settlement to expedite the launch. In a worst-case scenario, the product may only be launched after its patent expires in December 2026.
Despite the legal challenges, analysts remain optimistic about Sun Pharma's growth prospects, particularly in the specialty pharmaceuticals sector. JPMorgan projects a strong compound annual growth rate (CAGR) for Sun Pharma's specialty business from fiscal year 2024 to fiscal year 2027. The company's strategic focus on innovative therapies and expanding its product portfolio could position it well in the market.
The impact of the Leqselvi injunction will be closely watched by investors and stakeholders.