Mumbai: Drug maker Lupin Ltd sees revenue rising above 20% in 2009-10 aided by growth in the US and India, with core margins expected to top 19.5% on better product realisations, a senior company official said.
Mumbai-based Lupin expects to end the year to March 2009 with a revenue and net profit growth of 30-35% over last year, notching core margins of 19.5%, S. Ramesh, president-finance and planning, told Reuters on Monday.
For fiscal 2007-08, Lupin netted profit of Rs408 crore on revenue of Rs2,706 crore.
“If we talk of our major markets...comprising of US, Europe, Japan, South Africa, Australia and India itself, we have not seen any big downturn. It is business as usual as far as we are concerned,” he said.
Lupin was evaluating counter-party and country risks and was being cautious on exports to frail economies of CIS countries and Russia, and was going slow on bulk drugs supplied to buyers in countries including Latin American regions, he added.
The pharmaceutical industry has so far largely been relatively isolated from the recessionary winds blowing through many countries, as demand for drugs is not expected to fall drastically even during times of a deep financial crisis.
“Our growth engines remain the same, our focus on advanced markets ... and a large growth rate in the Indian market itself.”
India, which contributes about a third of Lupin’s turnover, is expected to maintain a growth rate of more than 20-22%.
Lupin is in the process of adding 300-400 people to its 2,400-strong sales team even as it looks to chronic disease treating drugs and products licensed from other companies to buttress growth, he said.
In the US, Lupin’s other top market, more branded drugs and entry into new therapy areas such as oral contraceptives will drive growth, he said adding revenue from this market is seen growing to $260 million in FY09 from $180 million last year.
There has been no slowdown of approvals from the US Food and Drug Administration for Lupin’s products, after the regulator found 15 deficiencies in Lupin’s drug unit in Madhya Pradesh last November, he said.
“This was a routine audit that took place. This does not give us too much cause for concern.”
In Japan, which accounts for about 13% of Lupin’s revenue, it hopes for a healthy share of the generics market as the country pushes for increased generics drugs usage.
Generics’ share in the $30-billion Japanese drug market is seen rising to 30% in 5 years from 6% now, he said.
“It is a difficult market but we have increased profitability from our Japanese unit by looking at back-ending of production and API sourcing from India...but all these have their own regulatory pathway to follow and it takes about two years in general to get to the market in a big way.”
The back-ending of production and sourcing of bulk drugs will entail adding capacities in India, and will be partly funded by a $50 million-$60 million annual capex the company targets for the next few years.
Lupin acquired Japan’s Kyowa in 2007 and last year picked up stakes in South Africa’s Pharma Dynamics, Germany’s Hormosan Pharma and Australia’s Generic Health.
Lupin continues to look for acquisitions in East Europe, the Gulf region, South East Asia and Latin America, he added.
“If at all anything, today is a good time for acquisitions, the prices are pretty depressed,” he said
The company, which spends about 6% of its turnover on research and development, plans to launch an oncology biosimilar drug in a year’s time, he added.