*Note: the figures in brackets indicate figures for the previous year
Mumbai, 29 July 2004: Lupin Limited today announced that it plans to triple its spend on
Research from Rs. 400 million in FY 2003-04 to Rs. 1.20 billion in FY 2004-05.
Speaking at the company’s 22nd Annual General Meeting, Chairman Dr. Desh Bandhu
Gupta said, “This increase in spend is an investment for the future. This will help us to
accelerate our efforts towards NCE, NDDS and generics research and drive the company’s
aggressive growth plan in the advanced markets.”
He said that with the increased spend on Research the company is targeting filing of over 14
ANDAs this year. “We have already filed 2 ANDAs in the first quarter of 2004-05. In
addition we have also filed 2 DMFs and a substantial part of our ANDA filings will be based
on our own API,” he said. “We have also initiated Phase I clinical trials of our Psoriasis drug
candidate and Phase II clinical trials of our anti-migraine lead”.
In addition to the increased spend on Research, the company is also in the process of setting
up its own marketing operations in select geographies using value-added generics and
branded products based on its proprietary technologies.
“We have established Lupin Pharmaceuticals Inc., a wholly owned subsidiary in the US.
During the first quarter of FY 2004-05, the company spent Rs. 100 million in promotional
expenses in the US market. We continue to see consolidation in the branded market creating
an opportunity for mid size players in niche segments. We believe that our focus on the US
$8 billion pediatric market is a good opportunity for the organization to benefit from this
consolidation over the next few years,” he said.
Apart from the US the company has also initiated steps to accelerate growth of its finished
dosage business in markets like Japan, Australia and Latin America through a mix of
strategic alliances and partnerships, Dr. Gupta said.
In the API business, he said the company was consolidating its position in cephalosporins
and broadening its range as well as enhancing its scale in the statins and ace-inhibitors. “To
fuel the growth of tomorrow, the company plans to invest Rs. 1.5 billion in finished dosage
and API facilities,” Dr. Gupta said. “We have already commenced operations at our state-of-the-art non-cephalosporin finished dosage facility in Goa”.
The company, he said, has performed extremely well in the domestic finished dosages
market recording a growth of 44%. In addition to setting up a dedicated field force for
Diabetology, the company proposes to continue launching innovative products and
combinations in the lifestyle segments, he said. As a part of its post-2005 strategy, Lupin
initiated an aggressive entry into the herbal market (global market size $60 billion) with the
launch of 10 products in India.
Earlier in the day, the company announced that its gross revenues for the quarter ended 30
June 2004 increased by 13% to Rs. 3.15 billion (Rs. 2.78 billion). Net revenues grew by 14%
to Rs. 3.00 billion (Rs. 2.64 billion). Domestic revenues increased by 33% to Rs. 1.77 billion
(Rs. 1.33 billion). Export revenues stood at Rs. 1.22 billion (Rs. 1.31 billion).
As an investment towards the future, the company spent significantly larger amounts for
Research and on promotional expenses in the US in the quarter. During the quarter,
Research expenses more than tripled to Rs. 173 million (Rs. 54 million) and US market
promotional expenses were Rs. 100 million (nil). The company expects to reap significant
returns from these investments in the future.
Driven by the sales from the US market and strong performance in the domestic market,
the company’s finished dosage business increased by 55% to Rs. 1.59 billion constituting 53% of
revenues. API sales dropped by 13% on account of lower realization and volumes of certain
products.
The depreciation of the Rupee vis-à-vis the US Dollar during the quarter, resulted in an
adverse exchange impact on the company’s net foreign currency liability to the tune of Rs.55 million.
Interest cost was lower at Rs. 71 million (Rs. 160 million) on account of debt repayment
during the previous year. Profit before tax was at Rs. 262 million (Rs. 393 million). Tax
outgo was lower at Rs. 55 million (Rs. 112 million) on account of higher Research spend.
Profit after tax was Rs. 206 million (Rs. 281 million).
HIGHLIGHTS
Advanced markets
API and Finished Products:
- Total revenues from the advanced markets (North America and Europe) were at Rs.398 million (Rs. 389 million).
- Finished Dosage revenues from the advanced markets were Rs. 113 million (Nil).
- Two ANDAs and two DMFs filed during the quarter
Developing Markets
API:
- API revenues (net) from the developing markets (including India) stood at Rs 1.10
billion (Rs 1.21 billion).
- Export revenues de-grew 12% to Rs. 770 million (Rs. 874 million).
- API revenues from the domestic market were Rs 334 million (Rs. 337
million).
Finished dosage:
- Finished dosage revenues from developing markets (including India) grew 44% to Rs
1.48 billion (Rs. 1.03 billion).
- Revenues from the top 20 brands in India increased by 23%
- Lupin’s 18% volume growth performance was the third best amongst the top 20
companies in the industry. This was against an industry volume growth of 9.4%.
Lupin’s value growth was at 13% as against the market growth of 9.1%. (Source: AC
Nielsen ORG MARG Jan04 – Jun04)
Research:
- Initiates Phase I clinical trials for Psoriasis and Phase II clinical
trials for anti-migraine lead
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