Dr Reddy's fourth-quarter profit misses estimates as U.S. sales slump

MUMBAI (Reuters) - Dr Reddy's Laboratories Ltd reported a fourth-quarter profit that was below analysts' estimates as increased competition and regulatory hurdles hit business in its largest market, North America.

The country's second-largest drugmaker by sales posted a January-March net income of 3.38 billion rupees ($52.56 million), missing forecasts of 4.27 billion rupees, according to Thomson Reuters I/B/E/S.

This was, however, significantly higher than the 1.23 billion rupee net income the company had reported a year earlier, when it was hit by a charge related to loss of payments in Venezuela.

"FY17 has been a challenging year due to lack of new product approvals for the U.S. market," Chief Executive G.V. Prasad said in a statement to exchanges on Friday.

 

Revenue from North America slumped 19 percent from a year earlier, overshadowing a rise in revenues from Europe, India, emerging and other markets. Total revenue fell 5 percent.

At least four of Dr Reddy's plants that supply drugs to the United States are under scrutiny by the U.S. Food and Drug Administration.

Last month, the FDA issued a notice of concerns over the company's Bachupally facility in southern India, which accounts for nearly 65 percent of Dr Reddy's U.S. revenue, according to analysts.

The problems have increased costs and crippled the company's ability to maintain a steady supply of drugs to the United States, and chances of getting approvals for new drugs.

($1 = 64.3050 Indian rupees)

(Reporting by Zeba Siddiqui; Editing by Miral Fahmy and Subhranshu Sahu)