India’s second-largest drug maker on Tuesday posted a massive net loss of Rs 783.5 crore in the fourth quarter ended March due to a one-time impairment provision on certain made on certain intangible assets related to Gavis acquisition in US.
The management of Lupin believes the worst may be over on drug pricing pressures in the US, the company told investors in an interaction after reporting its quarterly earnings.
India’s second-largest drugmaker on Tuesday posted a massive net loss of Rs 783.5 crore in the fourth quarter ended March due to a one-time impairment provision on made on certain intangible assets related to the Gavis acquisition in the US.
Ace investor Rakesh Jhunhjhunwala, who holds 1.92 percent stake in Lupin, was among those who quizzed the management on pricing pressure.
"I won't say that price erosion is gone but I'll say that days of double-digit price erosion, we are hoping, are behind us,” Vinta Gupta, CEO of Lupin, said during the talk.
Increasing competition and a consolidating customer base have been hurting profits at generic drug makers supplying to the US, the world’s largest healthcare market.
So much that many large companies, such as Teva and Novartis, are even considering putting their generics business on the block.
"Companies have started getting out of portfolios that don't make sense,” she told Jhunjhunwala during the call.
Additionally, she said that customers were also accommodative of the fact that the industry has reached a pain point and added that balance needs to shift.
“We are addressing pockets of our portfolio where we have pressures and are working with our channel partners, our customers to see how we can work together to ensure sustainable supply,” she added.
The company reported a net profit of Rs 383.6 crore in the year-ago quarter. The sales fell 2.8 percent to Rs 4,179 crore.
A Reuters poll of analysts estimated net profit to Rs 323.8 crore in the fourth quarter, while revenues at Rs 3,952 crore.
The company took an impairment of 1464.3 crore on Gavis.
Excluding one-time impairment provision, the net profit of Lupin stood at Rs 358.6 crore, higher than analyst estimates.(With inputs from Reuters)