Aurobindo foresees high growth in injectables biz

Expects at least 22 product approvals in FY16 for US market

Aurobindo Pharma Limited said it expected its injectables business to grow at 50 per cent in the next financial year and would continue to achieve a fairly higher growth in the next two to three years from then, on the back of the products lined up for approvals from the US Federal Drug Administration (US FDA).

Aurobindo’s injectables’ business has been growing at a rapid pace and currently stood at $50 million for the nine-month period ending December 2014.

Elaborating on the new business opportunities at a recent conference call with the analysts, Aurobindo's top management said that of the 45 product filings pending with the FDA in this segment, they expected to get at least 25 approvals during the next financial year.

“One of the things that I believe will happen is ... because of many products that we have filed, the products with the higher sales potential will start getting approvals towards the end of fiscal year 2016. So, in the fiscal year 2017, we will see a full-year growth on the products that are getting approved this year,” said Ronald Quadrel, chief executive officer of Auromedics Pharma, one of the American subsidiaries of Aurobindo.

The company’s injectables portfolio currently comprise antibiotics and some antianxiety drugs.

According to Aurobindo Pharma's managing director N Govindarajan, the company will get into the oncology and hormonal products. With more time, it will probably also get into the renal market, besides diversifying into nanosphere type and liposomal type suspension or the more difficult type products as they move forward.

Meanwhile, the company also indicated that it would try to get out of the commodity type products across the portfolios, going forward. “In the next three to five years, I think, instead of looking at each business and looking at what is missing, overall we would like to see that the portfolio itself is moving out of commodity and becoming more and more differentiated is what we are focusing across the globe,” Govindarajan said.

The company is also hopeful that the American acquisition Natrol would start giving 20-25 per cent growth in the long-term after registering a 15 per cent growth in the first year with an adjusted EBIDTA of $14 million.

Aurobindo has reported a 48 per cent growth in its operating income to Rs 3,166 crore in the quarter ended December 2014, on the back of a 76 per cent growth in formulations revenues. However, its net profit was down 7.9 per cent to Rs 384.4 crore due to the increased costs. For the fourth quarter, it expects to work towards the 20-22 per cent EBIDTA margins as compared to 19.3 per cent in the third quarter.