Glenmark Pharmaceuticals on Thursday posted a 23 percent increase in net profit for the fourth quarter of FY17. This uptick was largely aided by the exclusivity of generic cholesterol lowering drug Zetia, though overall the earnings were much below street estimates.
On a year-on-year basis, Glenmark’s net profit rose to Rs 183.7 crore for the quarter compared to the previous year’s Rs 148 crore. Revenues rose 6 percent to Rs 2457.2 crore.
On sequential basis, Glenmark's net profit declined 61 percent and revenues by 4 percent. The company posted net profit of Rs 476 crore and revenues of Rs 2550 crore in Q3.
The results were much below analysts’ estimates. A CNBC-TV18 poll of analysts estimated the net profit to be in the range of Rs 511 crore to Rs 689 crore and revenues at Rs 2982 crore.
The profits were impacted due to a Rs 81 crore exceptional item, high expenses and decline in sales across Europe, Latin America, and other markets. The expenses shot up 13.6 percent to Rs 2152 crore on sequential basis.
For the full year, Glenmark net profit grew 49 percent to Rs 1108.8 crore, while revenues rose 20 percent.
“Our quarter performance was mainly driven by our US formulations business,” said Glenn Saldanha, chairman and managing director of Glenmark.
“In addition, our India business also managed to record growth despite various challenging factors in the market,” Saldanha added.
The US generics business constitutes around 40 percent of Glenmark’s business grew at 53.5 percent to Rs 1000.5 crore led by new launches including Ezetimibe - which has an 180-day exclusivity.
Ezetimibe used in the treatment of high cholesterol is the generic version of Merck-Schering Plough’s Zetia. Glenmark settled the patent litigation with Merck in May 2010.
As per the settlement, the company can launch the drug in December 2016 for 134 days of sole exclusivity, ahead of the April 25, 2017 expiry of Merck’s patent exclusivity for Zetia.
Glenmark has a licensing partnership with Par Pharmaceutical, a subsidiary Endo.
In the fourth quarter of FY17, Glenmark was granted final approval and launched Clobetasol Propionate Ointment 0.05 percent and Tretinoin Capsules, 10 mg, Glenmark’s first and only soft-gelatin capsule.
During the year, Glenmark filed 20 ANDA applications with the US FDA. Out of these, 9 were dermatological products, 3 were hormonal products, one was onco-injectable and 7 were oral solids out of which majority were complex or niche products.
Throughout the fiscal year, Glenmark was granted 17 ANDA approvals, comprising of 11 final approvals and 6 tentative approvals.
Glenmark’s US portfolio consists of over 113 generic products authorized for distribution. The company currently has 65 ANDAs in various stages of the approval process with the USFDA, of which 25 are Para-IV filings.
During the last four months, the company said its Goa and Baddi manufacturing facility were inspected by the US FDA.
"The Baddi manufacturing facility at Himachal Pradesh did not receive any observations. The Goa manufacturing facility received 4 observations to which we have responded to the US FDA," Glenmark said.
"At this point in time, we do not have any outstanding items with the US FDA regarding these plants," Glenmark added.
India, the company’s second-largest market, grew at moderate 7 percent to Rs 577 crore on account of due to the impact of demonetization and price controls.
Around a quarter of Glenmark’s Indian formulation portfolio comes under price control, the company said.
The European business declined 15 percent to Rs 230 crore
The rest of the world (ROW) business that includes Russia dropped 3 percent to Rs 289 crore. Glenmark’s Latin American sales continued to slide in the fourth quarter as well. The sales declined 44.55 percent to Rs 140 crore, as the Venezuela subsidiary’s sales dropped significantly, and even its other markets such as Brazil and Mexico did not perform well.
Glenmark’s Latin American sales continued to slide in the fourth quarter as well. The sales declined 44.55 percent to Rs 140 crore, as the Venezuela subsidiary’s sales dropped significantly, and even its other markets such as Brazil and Mexico did not perform well.
Glenmark has around USD 50 million is stuck in the bank account of its subsidiary in Venezuela.
The API business fell 10.4 percent to Rs 200 crore.
Giving an update on the company’s research and development efforts, Glenn Saldanha said “during the quarter, we made significant progress on our R&D pipeline especially the respiratory assets.”
“We reported positive results from a Phase 3 trial of our molecule GSP 301 for seasonal allergic rhinitis; we received FDA clearance for an IND (Investigational New Drug) application to initiate a phase I study of our candidate GBR 1302 in patients with HER2+ cancers; and further, FDA also cleared our IND application to begin Phase 2 study of GSP 304 for COPD,” he added.
The company has a pipeline of 7 new molecular entities (NMEs), which includes 2 new chemical entities (NCEs) and 5 new biological entities (NBEs), in various stages of clinical development focused in the therapeutic areas of oncology, respiratory and dermatology.
The company also has 3 specialty products in clinical development targeting key indications in the respiratory therapy area.
The results were released after market hours.
In today's trading session, shares of Glenmark rose 1.80 percent to close at Rs 904.35 on BSE.