MUMBAI Lupin Ltd, India's third-largest drugmaker, reported a quarterly profit that met estimates as strong sales in its local market help offset weakness in the United States, and the company said it expects fourth-quarter earnings to improve.
Sales in India, Lupin's second-largest market, rose 17 percent in the quarter ended December. U.S. sales excluding those from intellectual property rose 1.8 percent, while including it, sales fell 4 percent, Lupin said.
While India is the biggest supplier of drugs to the United States, U.S. growth of most Indian companies has lagged over the past year due to a slowdown in the pace of new drug approvals, and consolidation between drug distributors there.
A spate of U.S. warnings and bans on companies over violations of manufacturing standards has also delayed launches.
Lupin's Goa plant in western India had been cited by the FDA for such violations after an inspection last July.
Managing Director Nilesh Gupta told analysts on a conference call on Friday that Lupin had addressed the FDA's concerns in a final response, and expects to hear from the agency "in a few weeks."
"Obviously, Goa is important, but increasingly, a lot of new products are coming from other plants," Gupta said, adding that the FDA has since approved three of the company's drugs that were produced at the Goa site.
At another of Lupin's plants in Aurangabad in western India, the FDA cited similar concerns that Gupta said the company hopes will be resolved soon.
Lupin launched four products in the United States and got U.S. approvals for nine products in the quarter, it said.
Analysts expect Lupin's earnings this fiscal year to benefit mainly from sales of its generic versions of the type 2 diabetes drugs Glumetza and Fortamet, as there is limited competition in the market for both.
Lupin was the first to file with U.S. regulators for a generic form of Glumetza, and is hence entitled to six months exclusivity on the market. It produces the drug at its Goa site, but Gupta said he didn't see risk to the drug's supply.
Developed by Canadian firm Valeant Pharmaceutical International Inc, Glumetza clocked sales of $450 million in the year to September 2015, according to the healthcare research firm IMS Health. Lupin would have "the lion's share" of the Glumetza market, CEO Vinita Gupta said.
For the quarter ended Dec. 31, Lupin's net profit fell to 5.30 billion rupees ($78.3 million) from 6.01 billion rupees a year ago, but was exactly in line with analysts' estimates.
The company's shares rose as much as 10 percent in Mumbai on Friday.
($1 = 67.69 rupees)
(Reporting by Zeba Siddiqui in Mumbai; Editing by Gopakumar Warrier and Adrian Croft)
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Updated Date: Feb 06, 2016 01:15 AM