ArrowArtboardCreated with Sketch.Title ChevronTitle ChevronEye IconIcon FacebookIcon LinkedinIcon Mail ContactPath LayerIcon MailMenu BurgerPositive ArrowIcon PrintIcon SearchSite TitleTitle ChevronIcon Twitter
Companies

Cipla posts better-than-expected quarterly profit on US market gains

New drug launches in US boost revenue growth for Indian maker

The drugmaker is looking to tighten costs as competition intensifies. (Reuters/AP)

MUMBAI (NewsRise) -- Cipla reported a better-than-expected fourth-quarter net income as new product launches in the U.S. helped the Indian drugmaker offset a slowdown at home and weaker business in Africa.

Cipla is seeking to boost its sales in the U.S. which accounts for about a fifth of its revenue. In comparison, larger rivals such as Sun Pharmaceutical Industries and Dr. Reddy's Laboratories generate as much as 40% of their sales from the world's biggest drug market. Most Indian pharmaceutical companies are grappling with cutthroat price competition the U.S., where the Food and Drug Administration has expedited its approval rate for generics, paving the way for increased competition.

Consolidated net income for the three months ended March 31 more than doubled on-year to 3.67 billion rupees ($52.7 million), Cipla said in a statement. Analysts were expecting a net income of 3.09 billion rupees, according to Refinitiv data.

Revenue grew 19% to 44.04 billion rupees, driven by a 53% jump in North American sales.

Sales in India rose 11%, while that in South Africa fell 3%. Sales in South Africa and the sub-Saharan Africa region have been declining due to funding constraints and intense competition.

"Our planned build-up of respiratory pipeline in the U.S. remains on track," Umang Vohra, managing director and chief executive of Cipla said in the statement. "From a sustainable growth and direction perspective, we are well-poised for FY20."

The drugmaker is also looking to tighten costs through product rationalization and streamlining its manufacturing network. The company, which had acquired two drugmakers in the U.S. -- Invagen Pharmaceuticals and Exelan Pharmaceuticals -- for $550 million in 2016, exited certain low-margin products from that portfolio.

Earlier this month, rival Lupin, India's third-largest drugmaker, swung to a profit in the fourth-quarter on the back of the launch of an exclusive drug.

Cipla shares fell 0.84% in Mumbai trading, while the benchmark S&P BSE Sensex gained 0.4%.

--Dhanya Ann Thoppil

Sponsored Content

About Sponsored Content This content was commissioned by Nikkei's Global Business Bureau.

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this monthThis is your last free article this month

Stay ahead with our exclusives on Asia;
the most dynamic market in the world.

Stay ahead with our exclusives on Asia

Get trusted insights from experts within Asia itself.

Get trusted insights from experts
within Asia itself.

Get Unlimited access

You have {{numberArticlesLeft}} free article{{numberArticlesLeft-plural}} left this month

This is your last free article this month

Stay ahead with our exclusives on Asia; the most
dynamic market in the world
.

Get trusted insights from experts
within Asia itself.

Try 3 months for $9

Offer ends June 30th

Your trial period has expired

You need a subscription to...

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers and subscribe

Your full access to the Nikkei Asian Review has expired

You need a subscription to:

  • Read all stories with unlimited access
  • Use our mobile and tablet apps
See all offers
NAR on print phone, device, and tablet media