Sun Pharma shares fall to 52-week low in response to 100% US tariffs on branded, patented drugs

Shares of India's largest drug manufacturer, Sun Pharma Ltd. fell over 4% on Friday, September 26, after US President Donald Trump announced that there will be a 100% tariff on branded and patented drugs being imported in to the US, starting October 1.

The tariffs will not be applicable to those companies that have plants in the US, are building plants in the US, or have broken ground for building plants in the US.

Sun Pharma has key specialty products like Illumya, Cequa, Odomozo, and Winlevi and the entire business comprises of 19.3% of its overall sales.

In financial year 2025, Sun Pharma's specialty sales increased by 17% from last year to $1.2 billion, while global Illumya sales grew by 17% to $681 million.

However, the company does not disclose sales from the US plants. The management has earlier indicated that the current capacity is good enough in case they need to undertake onshore manufacturing, without adding new capacity.

In an interaction with CNBC-TV18 on Friday, Aditya Khemka of InCred Asset Management said that a possibility of tariffs being imposed on Pharma generics cannot be ruled out.

“Pharmaceuticals, such as prescription drugs, over-the-counter drugs, biologics, and specialty drugs, will not be covered under this investigation as those imports are being examined in a separate Section 232 investigation,” the US Commerce Department said.

Khemka said that he sees some impact on Sun Pharma and Wockhardt due to US tariffs on branded Pharma products, which could potentially have some biosimilars as well, and in that case, Biocon could also end up being at risk.

"Will not touch the Pharma business as an investor as clarity emerges on tariffs," Khemka said.

Systematix is of the view that the tariffs are very steep and the announcement may have a material impact on Sun Pharma, impacting its annual Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) by 5% to 10%.

"We also need clarity whether 100% tariffs would be applicable on Europe where mutually agreed tariffs on medicine is 15%. In that situation, impact on Sun will be much lower," the note added.

Shares of Sun Pharma are trading 3.5% lower on Friday at ₹1,571.3. The stock had gained 1.5% over the last one month. The stock now trades at a 52-week low.