MUMBAI (NewsRise) -- Lupin, India's second-largest drugmaker, reported a surprise third-quarter loss, hurt by a one-time provision for a fine imposed in litigation over a blood pressure drug.
The consolidated net loss for the quarter ended in December stood at 1.52 billion rupees ($21 million), compared with a profit of 2.22 billion rupees a year earlier, the company said. Analysts had expected a profit of 2.89 billion rupees, according to Refinitiv data.
Revenue rose 13% to 43.78 billion rupees.
The latest quarter had a provision of 3.42 billion rupees for a fine upheld by a European Union court in the company's appeal against a 2014 European Commission decision in the litigation over blood pressure lowering drug Perindopril. The quarter also had income worth 2.10 billion rupees from Lupin's licensing partnership with AbbVie for the development and sale of its novel oncology drug to treat hematological cancers.
"After a tough first half, we are now starting to see growth in the U.S.," Lupin Managing Director Nilesh Gupta said in a statement. The growth momentum in the U.S will continue into the next quarter as Lupin is on track with important launches like thyroid drug Levothyroxine and Ranolazine, used to treat angina, Gupta said.
North America formulations sales, which accounted for 32% of Lupin's overall revenue, fell 1% to 14.2 billion rupees. The drug maker launched six products in the U.S. in the quarter.
Lupin and its peers have been grappling with falling drug prices in the U.S., where the Food and Drug Administration has hastened its approval rate for generics, paving the way for increased competition. A rising number of retail pharmacies in the U.S. are also joining hands to gain leverage in buying generic drugs in bulk, pushing prices further down.
Rival Cipla reported a 17% fall in third-quarter profit to 3.32 billion rupees. Analysts were expecting the company to report a profit of 3.72 billion rupees, according to Refinitiv data.
The earnings were hurt by "the challenges" in the tender business that saw a 48% decline in revenue, Cipla said. Revenue from the U.S. grew 18%, while the South Africa business grew 9%.
Cipla has limited exposure to the U.S. generic drug market at about 15% of overall revenue, compared with rivals that have up to 50% exposure. This augurs well for the company, given the challenging environment in the largest drug market in the world, analysts say.
Cipla said the U.S. drug regulator's inspection of its plant in western India's Maharashtra state and U.S. unit Invagen have ended with minor and procedural observations. Cipla also received observations from a recent inspection of the plant in the Goa state for which responses are set to be filed, it added.
Last week, another generic drug maker Dr. Reddy's Laboratories reported a better-than-expected 65% surge in quarterly profit helped by a one-time gain and lower taxes.
Lupin shares gained 0.6% on Wednesday, while Cipla ended 3.8% higher in Mumbai trading. The benchmark S&P BSE Sensex closed 1% higher.
--Dhanya Ann Thoppil