The net profit was helped by depreciating rupee against dollar and euro in its key US and Europe markets, that constitute nearly three-fourths of sales.
Aurobindo Pharma net profit declined 22 percent Rs 611.43 crore in the second quarter ended September on year-on-year (YoY) basis.
The net profit drop was cushioned by depreciating rupee against dollar and euro in its key US and Europe markets, that constitute nearly three-fourths of sales.
In the same quarter previous year the drug maker’s net profit stood at Rs 781 crore, largely benefited from the launch of low competition Sevelamer tablets in the US market. Sevelamer is used in the treatment of chronic kidney diseases.
Total income rose 7.5 percent to Rs 4,777.7 crore in Q2FY19 compared to previous year's Rs 4446.2 crore.
The second quarter results were above analysts' estimates.
Analysts polled by Reuters saw net income of the country's second-largest drugmaker at Rs 605.4 crore and revenues at Rs 4,565.8 for the second quarter of FY19.
The EBITDA margin for the quarter was 21.6 percent.
Research and Development (R&D) spend was at Rs Rs 216.8 crore which is 4.6 percent of revenues.
Sales of formulations or generic drugs, which contribute little over four-fifths of total revenue, grew 7.4 percent to Rs 3934.8 crore in Q2FY19, compared with Rs 3663 crore in the year-ago period.
Sales of active pharmaceutical ingredients (API), the key raw materials that go into the production of drugs, rose 5.8 percent to Rs 816.6 crore.The US formulation business contributed 47 percent to the total revenue and grew 6.1 percent to Rs 2226.8 crore helped rupee depreciation.
On constant currency basis, sales dropped 2.6 percent YoY.
The company has launched 14 products, including two injectables during the quarter
The European Union formulations business contributed 24.3 percent of total revenue and grew 3.9 percent to Rs 1156.5 crore on YoY basis in Q2FY19. In Euro terms, sales declined by 3.6 percent.
As on September 30, Aurobindo said it had transferred manufacturing of 97 products from Europe to India to reduce costs. Aurobindo's growth in Europe is led by inorganic expansion.
In July 2018, Aurobindo Pharma has signed a definitive agreement to acquire commercial operations and supporting infrastructure in five European countries from Canadian drugmaker Apotex International.
Last year, it acquired Portugal’s Generis Farmaceutica from Magnum Capital Partners for €135 million. In January 2014, Aurobindo bought loss-making Western European commercial operations of Irish drugmaker Actavis Plc for €30 million.Sales from rest-of-the-world market grew 26.3 percent to Rs 307.5 crore.
The antiretroviral (ARV) business jumped 17.6 percent to Rs 244 crore during the quarter.
ARVs used in the treatment of HIV-AIDS contributes about 5.1 percent of Aurobindo’s gross sales.
“We have delivered a healthy quarter in terms of both financial performance and developments in a differentiated portfolio," said N Govindarajan, managing director of the company.
" Our revenues increased by 7 percent YoY, EBITDA margin for the quarter was at 21.6 percent and net profit after JV share and minority interest was at INR 611.4 crore,” Govindarajan added.
During the second quarter, the company filed 25 abbreviated new drug applications (ANDAs) with USFDA.
The company said it as part of its differentiated portfolio it had filed two ANDAs in dermatology and one nasal segment in H1FY19.
On a cumulative basis, the company received 385 approvals from the USFDA.
“Our focused efforts to commercialize differentiated product basket are aimed at creating sustainable profitability for the future,” Govindarajan said.
Acquires assets of Advent Pharmaceuticals
Aurobindo said it had acquired certain R&D assets of Melbourne. Australia-based Advent Pharmaceuticals in an all-cash deal for $12.5 million.
Advent is into the development of substitutable generic inhalation products for the US market. With the acquisition, Aurobindo will join the race to launch complex inhalation-based products mostly used for the treatment of asthma and other respiratory diseases.
The results were announced after market hours.Shares of Aurobindo Pharma dropped 1.84 percent to Rs 798.30 on BSE, the benchmark Sensex declined 0.98 percent to end 34,812.99 points.