Glenmark Q1 profit rises 24% to Rs.226.8 crore

Glenmark posted a 24% increase in Q1 net profit on the back of strong sales growth across the US, India and Europe markets

Glenmark will launch cholesterol lowering pill ezetimibe in December.
Glenmark will launch cholesterol lowering pill ezetimibe in December.

Hyderabad: Glenmark Pharmaceuticals Ltd on Friday posted a 24% increase in net profit in the fiscal first quarter ended June on the back of strong sales growth across the US, India and Europe markets.

Glenmark’s net profit rose to Rs.226.8 crore for the quarter compared to the previous year’s Rs.183.5 crore. Revenues rose 18% to Rs 1,943 crore.

While net profit was above analysts’ estimates, net sales came in below expectations. A Bloomberg poll of five analysts estimated the net profit at Rs.207.8 crore, while eight analysts estimated the net sales at Rs.1,990.6 crore.

The US business that constitutes little over a third of Glenmark’s business grew at 24.4% to Rs.698 crore led by new launches in the previous quarters..

In the first quarter of fiscal year 2016, Glenmark was granted approval for 5 products. It filed 4 abbreviated new drug applications (ANDAs) with the US Food and Drug Administration (USFDA). In the second quarter, the company intends to file five ANDAs with the USFDA.

Glenmark’s US portfolio consists of over 100 generic products authorized for distribution. The company currently has 62 ANDAs in various stages of the approval process with the USFDA.

“The US business continues to perform well and the recent approvals for the business will ensure the growth momentum will continue,” said Glenn Saldanha, chairman and managing director of Glenmark.

Saldanha said he expects a number of launches in the coming quarters including the big launch of cholesterol lowering pill ezetimibe in December.

Ezetimibe is the generic version of Merck-Schering Plough’s Zetia. Glenmark settled the patent litigation with Merck in May 2010. As per the settlement, the company can launch the drug in December 2016 for 134 days of sole exclusivity, ahead of the 25 April 2017 expiry of Merck’s patent exclusivity for Zetia.

Glenmark has USFDA approval for ezetimibe. Analysts estimate ezetimibe will contribute about 10% of Glenmark’s sales in FY17.

India, the company’s second largest market, grew at 10.4% to Rs.513.7 crore on account of market share growth across key therapeutic segments such as cardiac, respiratory, and dermatology segments.

Saldanha said Indian sales have grown less than expected due to the impact of ever increasing drugs added to National List of Essential Medicines (NLEM), which come under price control.

Around a quarter of Glenmark’s Indian formulation portfolio comes under NLEM, the company said. The European business grew 36.5% to Rs.150 crore on the back of new launches in UK and Germany. The company said it won new drug supply contracts in Germany.

The rest of the world (ROW) business that includes Russia grew 23% to Rs.200 crore. Glenmark’s Latin American sales declined 29% to Rs.156 crore, as the Venezuela subsidiary’s sales dropped significantly, and even its other markets such as Brazil and Mexico did not perform well.

Glenmark said around $50 million is stuck in the bank account of its subsidiary in Venezuela. “We are hoping that the government’s efforts will help us recoup our cash in Venezuela,” Saldanha said.

Shares of Glenmark rose 1.28% to close at Rs.845.80 on BSE, while the benchmark Sensex gained 1.05% to end at 28,152.40 points on Friday.