Lupin posts record net profit of Rs882 crore in Q1 FY17
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Hyderabad: Lupin Ltd, India’s third largest drug maker, reported a 55% growth in consolidated net profit for the quarter ended 30 June, beating analyst estimates on the back of improved US sales.
Net profit rose to Rs.882 crore in April-June period from Rs.568.6 crore a year ago, Lupin said in a statement to BSE on Tuesday.
Total revenues grew 41% to Rs.4,439 crore, the company said.
A Bloomberg survey of 22 analysts had estimated net profit at Rs.790.5 crore.
The North America formulation or generic sales that contribute little over half of Lupin’s sales jumped 82.3% to Rs.2,189 crore in the first quarter, the company said.
The company said the growth in US sales was largely due to the significant contribution from generic versions of two diabetic drugs Glumetza and Fortamet and to some extent the integration of Gavis Pharmaceuticals, which it acquired in July 2015 for $880 million (around Rs.5,600 crore), seeking to expand presence in the US generics market.
Lupin has 180-day marketing exclusivity for generic anti-diabetic drug Glumetza, while Fortamet is a limited competition product where Lupin has been able to hold on to its 60% market share.
Lupin declined to provide individual sales figures of Glumetza and Fortamet, but an analyst who tracks the company estimated that both the drugs together could have contributed upwards of $100-$125 million to US revenues. The company said it launched three new products in the US market during the quarter, and now has 123 products in that market.
The India formulations business, which contributes one-fifth of the company’s revenue, grew at a moderate pace of 5.2%, recording sales of Rs.931 crore, as it was impacted by ever increasing drugs added to National List of Essential Medicines (NLEM), which come under price control, and increased selling expenses as the company expanded its sales force in India by appointing 1,000 new medical representatives in the first quarter of the calendar year.
Lupin’s Japanese business rose 30.9% to Rs.423.2 crore during the quarter.
Sales from active pharmaceutical ingredients (APIs) declined 12.4% to Rs.286.9 crore.
“This was a record quarter, driven by robust growth across all our key markets—the United States, India and Japan,” said Nilesh Gupta, managing director of Lupin. “We remain committed to maintaining our growth trajectory, given new product launches and approvals driven by strategic investments in technology and research.”
Giving an update on the remediation work at its Goa plant, which was under the scanner of the US Food and Drug Administration (USFDA) for non-compliance with certain manufacturing standards, the pharma company said it has completed most of the work.
“The timeline we have committed to the FDA is to complete the action by December,” said Gupta, adding, “our endeavour is to complete it before October-November”.
Analysts said Lupin may find it challenging to sustain US revenues as the 180-day exclusivity for generic Glumetza ended in July, and larger Indian rival Sun Pharmaceutical Industries Ltd’s is expected to launch the drug in the coming weeks with USFDA approving the latter’s Glumetza copy.
“Lupin’s results are in line with our expectation, but the challenge for the company is to sustain US revenues in coming quarters,” said Sarabjit Kour Nangra, vice-president, research, pharma at Angel Broking Ltd.
On Tuesday, shares of Lupin dropped 5.03%, or Rs.85.15, to close at Rs.1,607.60 on BSE, while benchmark Sensex declined 0.35% to end at 28,085.16 points.