Lupin promises better show in H2FY19 on US price stability, new launches

India’s third-largest drugmaker Lupin expects better performance in the second half of FY19 led by price stability in the US market, the ramp-up of speciality drug Solosec and launches of generic versions of Ranexa and Levothyroxine.

The drug maker launched speciality oral antibiotic Solosec in the US in May. Solosec is used in the treatment of vaginal infection among adult women.

The drug is eligible for at least 10 years of marketing exclusivity in the US and is expected to contribute significantly to the company in the coming quarters.

The company is banking on launches of limited competition drugs such as generic Ranexa to treat chest pain and hormonal medication Levothyroxine to beat the US pricing pressure.

Lupin on October 31 reported 41.2 percent year on year (YoY) fall in its second quarter profit to Rs 268.5 crore. Revenue from operations during the quarter was flat at Rs 3,951 crore. Sequentially, profit rose 32.5 percent and revenues grew 3.1 percent. The Q2 performance was also aided by forex gain of around Rs 200 crore.

The company expects the pricing erosion in the US to settle in the single digits from double-digit in the previous quarters.

On the regulatory front, the company said it had completed the remediation work at its Goa and Indore plants, which are under warning letters and

had asked for a meeting with USFDA to seek re-inspection.

The company hopes to solve the issues in FY19.

The company said it had made a meaningful progress on cost optimisation, including rationalisation of the product portfolio in the US, cost-cutting across sales and manufacturing functions and in R&D productivity.

“All these should start playing out from the next fiscal,” said Vinita Gupta, Chief Executive Officer of Lupin.

Lupin has been struggling in the US for the last few quarters, with lack of significant approvals and competition to its key product Methergine used in the treatment of postpartum haemorrhage and metformin franchise Glumetza and Fortamet.

The warning letter on two of its facilities in Goa and Indore is not helping matters blocking new product approvals.