Starry show among stars and stripes

TL pharma sector showed signs of recovery in the first quarter ended June ‘06, as US sales by domestic drug makers recovered sharply.

In spite of steep pricing pressure and increasing competition, domestic pharma majors, including Ranbaxy Labs, Dr Reddy’s Labs, Cipla and Sun Pharma, recorded growth rates of 8-433% in the US market on the back of new product launches.

Dr Reddy’s Labs saw the largest growth as formulations sales grew five-fold to Rs 430.4 crore. The domestic pharma major delivered impressive results in Europe too with revenue more than trebling to Rs 243.3 crore. Dr Reddy’s Labs’ consolidated net sales rose 147% to Rs 1336.8 crore while net profit climbed 383% to Rs 148.4 crore.

Sun Pharma’s US subsidiary, Caraco was better off too, with sales jumping 41% to $24.8m (Rs 116 crore) in the quarter ended June 06. Growth in the top line was mainly driven by new products launches, such as Ultracet, the company’s first Para IV approval.

Aurobindo Pharma’s US business performance was also robust. Sales rose over 50% to Rs 79.1 crore. US sales contributed to 31.4% of total exports compared with 23% and 31.5% for Europe and Asia respectively. Total sales increased 56.3% to Rs 438.6 crore while net profit jumped to Rs 36.2 crore, from Rs 2 crore in last year’s quarter.

Finally, Cipla and Lupin witnessed a 48% and 88% increase in revenues from the US and Europe to Rs 318.7 crore and Rs 52.7 crore, respectively. Cipla’s net profit rose 53% to Rs 170 crore, while Lupin’s net profit increased 17.4% to Rs 50.7 crore.

However, Wockhardt, GlaxoSmithKline (GSK), Nicholas Piramal, Biocon and Novartis recorded a disappointing performance in the quarter ended June ‘06. GSK saw a 12% fall in profit to Rs 91 crore partly accountable to a high base effect on a year-to-year comparison.

Nicholas Piramal too saw a slip in margins in the quarter ended June ‘06, due to Avecia takeover and an increase in R&D spending. Standalone net profit was down at Rs 51 crore, a 6% decline compared to last year’s quarter. Finally, Novartis and Wockhardt net profit sunk by 31.01% and 31.8% to Rs 25.8 crore and Rs 49.5 crore, respectively.


ET Intelligence Group