Lupin warns of more pricing pressure as fourth-quarter profit halves | Reuters

By Zeba Siddiqui | MUMBAI MUMBAI Indian drugmaker Lupin Ltd expects to launch over 30 products in the United States this year, but warned revenue growth would remain muted due to growing pricing pressure and competition in the world's largest healthcare market.'We've talked about medium single digits of price erosion in the past and I think we are now (seeing) high single digits,' Managing Director Nilesh Gupta told Reuters after Lupin reported a quarterly profit that halved from a year earlier.The country's third-largest drugmaker has been working on building a pipeline of high-value complex generic drugs in the United States to offset growing competition in plain generics. But a consolidation among drug distributors has hit generic companies' ability to negotiate on prices, and price hikes have also become harder to justify amid regulatory scrutiny.'Competition is increasing and (distributors) are getting more powerful than ever before,' Gupta said. The company expects to launch more than 30 drugs this year, most of which would be small to medium-sized opportunities, with bigger, more lucrative launches planned for 2019, he added

Reuters May 24, 2017 22:15:05 IST
Lupin warns of more pricing pressure as fourth-quarter profit halves
| Reuters

Lupin warns of more pricing pressure as fourthquarter profit halves
 Reuters

By Zeba Siddiqui
| MUMBAI

MUMBAI Indian drugmaker Lupin Ltd expects to launch over 30 products in the United States this year, but warned revenue growth would remain muted due to growing pricing pressure and competition in the world's largest healthcare market."We've talked about medium single digits of price erosion in the past and I think we are now (seeing) high single digits," Managing Director Nilesh Gupta told Reuters after Lupin reported a quarterly profit that halved from a year earlier.The country's third-largest drugmaker has been working on building a pipeline of high-value complex generic drugs in the United States to offset growing competition in plain generics. But a consolidation among drug distributors has hit generic companies' ability to negotiate on prices, and price hikes have also become harder to justify amid regulatory scrutiny."Competition is increasing and (distributors) are getting more powerful than ever before," Gupta said.

The company expects to launch more than 30 drugs this year, most of which would be small to medium-sized opportunities, with bigger, more lucrative launches planned for 2019, he added. North America sales at Lupin slumped 13 percent in the fourth quarter, dragging down net profit to 3.80 billion rupees ($58.63 million) from 7.48 billion rupees a year earlier. Analysts on average expected a profit of 6.45 billion rupees.

Compounding generic companies' challenges in the United States is increasing U.S. Food and Drug Administration scrutiny of foreign manufacturing sites that has resulted in warnings and bans on dozens of plants over quality control issues.Lupin's manufacturing costs and other expenses jumped about 30 percent in the quarter, during which it worked on upgrading its Goa manufacturing plant that is under FDA scrutiny for quality standards violations.

The U.S. business troubles during the quarter could not offset an increase in sales in other markets including India, Lupin's second-largest market, where revenue grew 14 percent.The company's shares fell as much as 7 percent to their lowest in nearly three years after the earnings report on Wednesday. They later pared some losses to close down about 2 percent in Mumbai.($1 = 64.8175 Indian rupees) (Reporting by Zeba Siddiqui in Mumbai; Editing by Himani Sarkar and David Evans)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

NYSE to delist three Chinese telecoms in dizzying about-face
Business

NYSE to delist three Chinese telecoms in dizzying about-face

By John McCrank and Anirban Sen (Reuters) -The New York Stock Exchange said on Wednesday it will delist three Chinese telecom companies, confirming its latest reversal on the matter a day after U.S. Treasury Secretary Steve Mnuchin told the NYSE chief he disagreed with an earlier decision to reverse the delistings

Oil and gas dealmaking peaks in Q4 as pandemic spurs consolidation - Enverus
Business

Oil and gas dealmaking peaks in Q4 as pandemic spurs consolidation - Enverus

(Reuters) - Deal making among oil and gas producers was at its highest for the year in the fourth quarter of 2020 as the pandemic-driven fallout in commodity prices spurred a wave of consolidation between explorers looking to scale up and drive down costs, a report from analytics firm Enverus said. Oil and gas producers made deals worth $27.1 billion in the quarter, up from $21 billion in the third, helped by three multi-billion dollar acquisitions in the prolific Permian basin of West Texas and New Mexico. ConocoPhillips acquired Concho Resources for $13.3 billion, the biggest pure shale acquisition by any company since 2011, topping the list.

Markets shift to price in chance of Democratic Senate wins
Business

Markets shift to price in chance of Democratic Senate wins

By Ritvik Carvalho, Wayne Cole and David Randall NEW YORK/LONDON/SYDNEY (Reuters) - The growing chances of Democratic wins in two pivotal U.S. Senate contests triggered financial market moves Wednesday that mirror hopes of more COVID-19-related stimulus and increased regulatory scrutiny of tech companies