MUMBAI (NewsRise) -- Indian drugmaker Lupin reported a 50% jump in first-quarter profit aided by a surge in sales in the U.S., where falling prices and rising competition had hurt demand for years.
Like its peers, Lupin has been struggling to grow its business in the U.S., where the Food and Drug Administration has hastened its approval rate for generics, intensifying competition. The company's U.S. revenue, barring currency fluctuations, declined 12% in the last fiscal year pushing the business to a loss, weighed by the competition in some of its key generic drugs and regulatory trouble at some manufacturing plants.
Lupin's net profit for the quarter ended in June stood at 3.03 billion rupees ($43 million), the company said. Revenue grew more than 15% to 43.56 billion rupees. Analysts were expecting the company to report a net profit of 3.30 billion rupees.
North America sales jumped 30%. Sales in the U.S. too surged 30% to $218 million, Lupin said in a statement.
This year is "critical" as the company is committed to delivering on strategic growth drivers, including commercialization of complex generics, ramp-up of specialty business, and delivering on operational and cost efficiencies, Nilesh Gupta, managing director of Lupin, said.
Lupin is building its complex generics drugs and specialty business pipeline in the U.S. with the launch of women's healthcare drug brand Solosec last year. It has also partnered to sell biosimilar Etanercept with Nichi-Iko for Japan and Mylan for Europe and other markets.
Meanwhile, smaller rival Cipla reported a 6% increase in first -quarter profit to 4.78 billion rupees. Analysts were expecting the company to report a profit of 4.96 billion rupees, according to Refinitiv data.
"We witnessed a muted first quarter owing to a combination of external volatility and some conscious business decisions taken with the long-term sustainability in mind," Umang Vohra, managing director and global chief executive of Cipla, said in a statement.
"Our growth drivers remain on track with sustained expansion of our basket of biosimilars in emerging markets and entry into new markets such as China to set up our respiratory franchise," Vohra said.
Last month, Cipla said one of its units is setting up a joint venture with Jiangsu Acebright Pharmaceutical to make, sell, and distribute drugs in China, the second-largest drug market in the world, where spending on medicines is set to reach $140 billion to $170 billion by 2023.
Cipla's revenue from North America jumped 67%. However, India reported a 12% decline and South Africa and sub-Sahara operations saw a 17% slump.
Lupin MD Gupta said the company is making steady progress to ensure regulatory compliance that has been a major overhang on its U.S. business. The drugmaker has four of its plants under the FDA radar. The regulator has slapped warning letters on the company's plants in the western Indian state of Goa and in the central state of Madhya Pradesh.
Shares of Lupin closed 4.1% higher in Mumbai trading on Wednesday, while that of Cipla rose 3.8%. The benchmark S&P BSE Sensex lost 0.8%.
--Dhanya Ann Thoppil