Bangalore:Drug maker Dr Reddy’s Laboratories Ltd posted a quarterly net profit from a loss a year ago, lifted by the launch of a new generic in the US, but missed forecasts due to lower earnings from Europe.
The firm launched its acute migraine drug Sumatriptan, a generic of GlaxoSmithKline Plc.’s Imitrex, in the US market in the December quarter, helping it almost quadruple its revenue from North America to $137 million (Rs671.3 crore).
But earnings from Dr Reddy’s Europe business fell, mainly due to a drop of 2% in Betapharm Arzneimittel GmbH revenue to $41 million as volume growth in existing products was offset by declining prices, said a company statement.
Constrained: A Dr Reddy’s lab in Hyderabad. Earnings from?the firm’s Europe business fell, mainly due to a 2% drop in Betapharm revenue. Bharath Sai / Mint
Germany’s Betapharm, which Dr Reddy’s bought in 2006 for $572 million, has been facing supply constraints and falling prices. Dr Reddy’s has moved Betapharm’s main manufacturing unit to India and other facilities in Europe to cut costs.
In December, Betapharm preliminarily won eight supply contracts in a tender by Germany’s largest health insurer, Allgemeine Ortskrankenkasse (AOK), that the company had said would boost volumes but at lower margins.
Dr Reddy’s posted a net profit of Rs192 crore for the three months to December, compared with a net loss of Rs121 crore in the year-ago period. A Reuters survey of eight brokerages had forecast net profit at Rs201 crore. Estimates ranged from Rs110 crore to Rs319 crore.
Ahead of the announcement, shares in Dr Reddy’s ended 2.6% higher at Rs467.90 on the Bombay Stock Exchange, or BSE.
Shares in Dr Reddy’s, which has a market value of $1.6 billion, fell 7.7% during the December quarter, less than a 19% drop in the BSE health care index and a 25% slump in the BSE benchmark Sensex.