Building for the Future
We believe better health outcomes are fundamental to building a better world for all. We are on an exciting journey to offer integrated pharmaceutical solutions to facilitate wellness and well-being across the world. Our overall performance and the determination of every member of Team Laurus makes me confident that we are on the right course to grow sustainably and create lasting value for all stakeholders.
When we talk about growth, it has to be powered by a sound strategy in motion. We are focusing on enhancing and enriching our current portfolio, stepping up our R&D investments for product development and strengthening our manufacturing capabilities. Our diversified and integrated capabilities enable us to capture significant opportunities in margin-accretive segments and foray into emerging markets, while continuing to grow in our traditional regions.
Our consolidated revenues stood at Rs.22,919 million in 2018-19, against Rs.20,562 million in 2017-18. We have once again demonstrated excellence in our operational efficiencies. Each of our core business segments (Generics - API, FDF, Ingredients and Synthesis) registered good performance in 2018-19. However, margins were affected as major raw material procurement prices increased due to shortage of intermediaries, environmental issues and closure of manufacturing facilities in China. We have received all appropriate regulatory approvals, have a noticeable frontend presence in the US, a strong product portfolio and a growing presence in global markets. Considering these encouraging developments, your Company appears attractively placed to report satisfactory growth, going forward.
The margins were affected due to the high raw material costs and incremental fixed operational expenses, pertaining to the new formulation facility. We expect formulation sales to increase with new approvals in regulated markets and enhanced traction in existing products and geographies. This will improve the margins for the Company as operating leverage will kick in.
Formulations: Growth opportunity
Formulations play for us involves both scale and technology. Backward integration was our core forte, the focus now is to take our APIs forward. During the year, we started commercial supplies of FDFs to European markets and started shipping Metformin tablets to the US markets as well. We entered into a strategic partnership agreement with Global Fund for three-and-a-half years. This long-term agreement will enable us to fulfill our volume commitments to Global Fund for the treatment of HIV/AIDS.
This partnership has enhanced our determination to contribute to the global mission for treating millions of HIV/AIDS patients. We are optimistic about the future and our backward integration for the key molecule is already in place and the formulations business is expected to gather momentum with fresh orders.
So far, we have filed 19 ANDAs, 4 dossiers in Canada, 6 in Europe and 6 with WHO. We also filed 2 dossiers in South Africa and 2 in India; and close to 100 dossiers in the rest of Africa for product approvals.
Other business segments to supplement growth
We completed the validation of all second-line ARV APIs and we can now offer a comprehensive basket of APIs. Until now, we have been offering first-line APIs. Now we have a new basket of APIs, which will encompass both the first and second line.
During the year, we also started commercial supplies from Unit 5 to Aspen and got new orders from existing CMO partners.
With robust demand for our currently marketed products and a sizeable pipeline, we invested to ensure we have the capacity to continue delivering as we grow. This investment will enable us to quickly and efficiently execute our medium-term to long-term product launch programme and expand across our national and international markets.
Quality is non-negotiable
Our quality standards remain uniform for all our products, regardless of the markets in which they are launched.
We differentiate markets, based on price, not on quality standards. Quality is paramount to us and remains a 24x7 priority for us for all markets. This quality approach enables us to navigate the regulatory environment effectively, at a time when many pharmaceutical companies have experienced significant regulatory and compliance issues.
Our Company has been built around a quality culture that is reflected not just in the products we manufacture, but also in the mindset of our people. Our quality mindset ensures we continue to deliver consistent standards with unwavering focus. We conducted multiple audits during the year under review, and I am pleased to report that the outcomes were encouraging, validating our competence in the segment.
People drive change
An institution cannot be built for the long term, unless people put their hearts to its progress. A capable workforce is created by integrating good health practices into the daily life of every member of our team. We seek to promote health in all aspects of our employees'' lives, both at the workplace and outside of it. Our programmes perceive well-being and occupational health as interdependent and view prevention and risk management as holding equal status.
We have put in place a firm foundation for value creation and with our strengthened portfolio, are well positioned in global markets. With a solid strategy and disciplined execution, the opportunities for us are immense. We are building on our strengths to further extend our product portfolio and target fast-growing segments. I am grateful to all our stakeholders for their guidance and support in our journey. It is an honour for me to lead this great company, which is built for the long term.
Dr. C. Satyanarayana