Sun Pharma - Ongoing Clinical Trials Of Deuruxolitinib 12mg Put On Hold: Systematix

Systematix Research Report

Sun Pharmaceutical Industries Ltd. announced that the U.S. Food and Drug Administration has placed its Investigational New Drug application for higher dose of Deuruxolitinib (12 mg) for treatment of Alopecia Areata on partial hold owing to safety concerns related to pulmonary embolism.

However, the study on lower dose 8mg will continue.

The U.S. FDA may imminently only review the lower dose for approval while approval for higher dose can get significantly delayed. The higher dose was expected to be a differentiator for Sun Phrama, as it had relatively better efficacy (based on cross trial comparison) compared to competition (baricitinib and ritlecitinib).

We estimate the Alopecia Areata market opportunity for the novel therapies to be around $800 million and expect Sun Pharma to gain less than fair share (~15%) post this development.

Assuming Sun Pharma’s launch of Deuruxolitinib in FY25, we expect the product to be earnings per share neutral in the first year and EPS accretive from thereon.

We have cut our Deuruxolitinib revenue estimates for FY25 assuming a delayed launch and lowered our price-to-equity multiple from 27 times to 25 times.

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