NEW DELHI :
Lupin posted a loss of Rs1.3 billion in the July-September quarter, as against a profit of Rs2.7 billion year ago, as the company was weighed by a provision for a settlement in a US court and the loss it incurred on divestment of Kyowa CritiCare Co Ltd.
The company had to make a provision of Rs3.8 billion for settlement in a court related to US Medicaid and also incurred a loss of Rs1.7 billion on divestment of its entire stake in Japanese susbsidiary Kyowa CritiCare Co. The total one-time loss was Rs5.5 billion.
“This quarter notably has two one-off events, first of which is the settlement of the Texas Medicaid lawsuit, which we settled at $63.5million. We have provided about $10 million, and therefore the quarter impact is $53.5 million," the Lupin management said in a media conference call.
Lupin’s operational performance, however, was strong, with its consolidated revenue rising 10.3% year-on-year to Rs43.6 billion.
Growth in topline was led by sales of drug formulations in its largest market, India. Sales in the domestic market increased 11.5% to Rs13.4 billion.
Revenue from the North American market grew 6.1% to Rs13.2 billion as the company launched three new products during the quarter. The company now has 171 products in the US generics market, as per a release by the company.
The North American and Indian market each accounted for 31% of the total topline.
The company’s US business has been hampered by regulatory issues at four of its plants—Goa, Pithampur, Mandideep and subsidiary Gavis Pharmaceutical’s Somerset plant.
While the Goa and Pithampur plants have been under the regulator’s warning letter from the US Food and Drug Administration (FDA) since 2017 for violation of good manufacturing practices, the Mandideep plant had received a warning letter in September.
The US FDA had also observed serious violations of good manufacturing practices at the Somerset plant earlier this.
Lupin plans to ask the US to reinspect the Goa and Somerset plants by March, and the other two plants in the following quarter, the management said today.
The management said that it is taking remedial measures across the company, with the appointment of Johnny Mikell as its global head for quality a step in that direction.
The Lupin management also said that the company is currently looking at vertical integration of its Japan business, wherein it will manufacture more products from its Indian plants so as to bring costs under control. Its Japan operations have been hampered by price regulations, which were seen by a 4% decline in quarterly sales to 7.8 billion yen in Q2 from 8.2 billion yen last year.
“There is pricing pressure in Japan. It has been there for the last two years, but now annual price cuts are a given... Now the vertical integration story by doing more manufacturing out of India, those are there important things at play in Japan," the management said.