Hyderabad: Drug maker Natco Pharma Ltd’s net profit rose 68% in the quarter ended 30 June, driven by sales growth of its domestic formulations business.
The company posted a net profit of Rs.47 crore during the April-June quarter, compared with Rs.28 crore in the same period the previous year.
Income from operations grew 45% to Rs.325.2 crore.
The results were just short of analysts’ estimates. A Bloomberg poll of nine analysts estimated Natco Pharma’s net profit at Rs.49.93 crore and net sales at Rs.337.5 crore.
The formulations business, which accounts for a lion’s share of Natco Pharma’s revenues, grew 66% to Rs.284 crore.
The company said growth was predominantly driven by increased domestic sales of its oncology and hepatitis C products. Around half of Natco Pharma’s generic sales come from its oncology drugs.
Besides, Natco Pharma had the first-mover advantage in terms of sales of a generic version of Sovaldi. The company got approval in March 2015 from the Drugs Controller General (India) to sell a licensed generic copy of the anti-viral drug sofosbuvir in India.
Sofosbuvir is a $1,000-a-pill hepatitis C drug of Gilead Sciences Inc. and is sold under the brand name Sovaldi.
Natco Pharma sells sofosbuvir under its own brand, and also supplies the drug to third parties.
Natco Pharma’s performance was largely on account of its domestic business, and specifically due to the generic hepatitis-C portfolio based on sofosbuvir, said Afzaal Mohammed, pharma expert at Karvy Stock Broking Ltd.
The hepatitis-C franchise is expected to contribute about Rs.120-150 crore to total formulation sales, but with seven-eight companies vying for market share of Sovaldi and its combinations, it needs to be seen how much Natco Pharma’s price erosion is, Mohammed said.
Sales of active pharmaceutical ingredients or APIs—the key raw materials that go into manufacture of drugs—rose marginally by 2% to Rs.57 crore.
Shares of Natco Pharma dropped 1.65% to close at Rs.625.80 on BSE, while the benchmark Sensex declined 0.35% to close at 28,085.16 points.