 "Expect business to grow 20% in FY17: Vinita Gupta")
Drug maker Lupin beat Street estimates with 47 per cent profit growth. Chief Executive Officer Vinita Gupta tells Aneesh Phadnis she expects 20 per cent overall growth in revenue in the next financial year, as the company focuses on both generic and branded businesses. Edited excerpts
Lupin’s US business showed a 58 per cent growth on a year-on-year basis. Is it due to a one-off 180-day sale exclusivity of anti-diabetes drug Glumetza? Will the company be able to maintain this level of growth in the US?
The growth in the US business is because of a combination of factors. The first half of the year was tough and in the third quarter, we undertook multiple measures to optimise our generic and branded drugs portfolio. Glumetza has been a major contributor. We expect it to contribute significantly in FY17, as we feel there will be limited competition after the end of the exclusivity period. We would love to see this level of growth but it will be difficult to maintain this rate. Overall, we expect our business to grow 20 per cent in FY17.
Lupin concluded the acquisition of US drug maker Gavis in Q4. How much is it expected to contribute in FY17?
We had announced at the time of acquisition that we aim to triple Gavis’ revenue to $300 million by the end of FY18. We are on track to achieve it. We are looking to increase the market share of its existing products and plan to launch 12-15 products from Gavis pipeline this year. These would be in controlled substances and dermatology segments. We are also strengthening our branded drug business with the re-launch of two products from the Gavis portfolio. We have restructured our sales team to grow our business.
Lupin’s Goa plant received nine adverse observations from the US FDA in February. How is the issue being addressed and what impact do we see on business?
We have put up a strong remediation plan and are giving periodic updates to the FDA. We have sought a meeting with the regulator and hope to close the findings in the next three to six months. We have transferred the manufacturing of products to approved facilities in Aurangabad, Indore and the US. The challenge for us would be delay in product approvals from Goa if an FDA clearance is not received soon.
There has been a spike in interest cost in Q4. Will the cost be higher going forward?
We raised an $800-million loan to finance the acquisition of Gavis at attractive interest rates. We expect the interest burden to rise. However, the growth will be nominal.
What is the outlook regarding Japan and the domestic business?
Business in Japan has been under challenge because of government-imposed price cuts. We expect the business there to grow 10 per cent in the next couple of years. We are investing in complex generics and will be filing for our first bio-similar product in Japan in 2017. In the domestic market, we expect a 15 per cent growth despite the challenges such as price cuts and have expanded our sales force by recruiting 1,000 people in the fourth quarter.
Lupin’s US business showed a 58 per cent growth on a year-on-year basis. Is it due to a one-off 180-day sale exclusivity of anti-diabetes drug Glumetza? Will the company be able to maintain this level of growth in the US?
The growth in the US business is because of a combination of factors. The first half of the year was tough and in the third quarter, we undertook multiple measures to optimise our generic and branded drugs portfolio. Glumetza has been a major contributor. We expect it to contribute significantly in FY17, as we feel there will be limited competition after the end of the exclusivity period. We would love to see this level of growth but it will be difficult to maintain this rate. Overall, we expect our business to grow 20 per cent in FY17.
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Lupin concluded the acquisition of US drug maker Gavis in Q4. How much is it expected to contribute in FY17?
We had announced at the time of acquisition that we aim to triple Gavis’ revenue to $300 million by the end of FY18. We are on track to achieve it. We are looking to increase the market share of its existing products and plan to launch 12-15 products from Gavis pipeline this year. These would be in controlled substances and dermatology segments. We are also strengthening our branded drug business with the re-launch of two products from the Gavis portfolio. We have restructured our sales team to grow our business.
Lupin’s Goa plant received nine adverse observations from the US FDA in February. How is the issue being addressed and what impact do we see on business?
We have put up a strong remediation plan and are giving periodic updates to the FDA. We have sought a meeting with the regulator and hope to close the findings in the next three to six months. We have transferred the manufacturing of products to approved facilities in Aurangabad, Indore and the US. The challenge for us would be delay in product approvals from Goa if an FDA clearance is not received soon.
There has been a spike in interest cost in Q4. Will the cost be higher going forward?
We raised an $800-million loan to finance the acquisition of Gavis at attractive interest rates. We expect the interest burden to rise. However, the growth will be nominal.
What is the outlook regarding Japan and the domestic business?
Business in Japan has been under challenge because of government-imposed price cuts. We expect the business there to grow 10 per cent in the next couple of years. We are investing in complex generics and will be filing for our first bio-similar product in Japan in 2017. In the domestic market, we expect a 15 per cent growth despite the challenges such as price cuts and have expanded our sales force by recruiting 1,000 people in the fourth quarter.