Goldman Sachs in a report released just a while ago has recommended a SELL on Sun Pharmaceutical Industries. The latest verdict on Protonix has added another layer of risk around Sun. With Caraco’s sales continuing to decline, Sun’s US revenues in recent months have been dependent on generic Protonix. Sun has stated that it will continue to sell Protonix in the US. Coupled with theserisks, the stock trades expensively at significant premium to peers.
Additionally, on the court battle, Goldman’s Views are,
Should the district court judge ruling follow along the line of the jury’s verdict upholding Nycomed’s patent on Protonix, that could set the stage for the removal of generic Protonix from the market. This could also lead to damages awarded on Protonix (potentially shared by Teva and Sun). Lastly, any successful injunction attempt by Pfizer to stop Teva and Sun from selling generic Protonix could see significant pressure on Sun stock.
Goldman Recommends a SELL on Sun Pharma with a Target Price of Rs 1204.