Aurobindo eyes major growth in US

Aurobindo's overall capital expenditure plan could be around Rs 400 cr as against a capex of about Rs 350 cr last year

Hyderabad-based Aurobindo Pharma is expecting a significant growth in the business of its US-based wholly owned subsidiaries   Aurolife and AuroMedics Pharma LLC.

While Aurolife is a generic pharmaceutical product manufacturer, AuroMedics is responsible for generic injectable pharmaceutical products in the US.

According to Aurobindo’s managing director N Govindarajan, AuroMedics continued to see a steady increase in quarterly sequential sales over the past couple of years and generated $12 million (around Rs 72 crore) in Q4 of FY14. The annual sales from the company at $ 37 million (Rs 222 crore) last year, almost tripled the number in previous fiscal. Similarly, Aurolife saw an improvement in sales and turned profitable in 2013-14 generating a revenue of $74 million (Rs 444 crore).

In the current financial year, AuroMedics expects to generate a revenue of $60 million (Rs 360 crore). “Our run rate is averaging about ($) 5 million a month for this fiscal year, so that is 60 million total year for injectables,” AuroMedics president, Ronald Quadrel, told a conference call held by Aurobindo.

Replying to questions, Quadrel said the company was going to see a lot more growth going forward from the injectable side. “Right now we have 45 files with FDA (US Food and Drugs Administration) under review. We are expecting another 8 to 9 this calendar year and another 30 next year. So I am expecting in calendar year 2015 between 20 and 30 approvals and in calendar year 2016 about the same.

Depending on the timing of those particular approvals, we could see significant growth over the next two to three years on the injectable side.”

Quadrel also stated AuroMedics would commission ‘Oncology Block’ most probably in March 2015 and filing of products with USFDA  would start towards the year-end.

On the other hand, according to Aurobindo USA chief executive officer Robert Cunard, Aurolife has seen growth on two aspects. One was the expansion of the base business and the second part was the ‘Federal VA’ awards with several new products, which represented approximately $15-20 million (Rs 90-120 crore) in the 2013-14 revenues.

Cunard envisages a strong growth for Aurolife in 2014-15 also as there were “new product awards for the year”. He expects Aurobindo’s US business will continue to see growth in the next two-three years. “I think there are select items that will be key growth drivers in the future and should be nice margin contributors as well,” he added.

Govindarajan also said the base business growth witnessed in the US would sustain at least for the next 2-3 years. Driven by successful product launches and reintroduction  of Cephalosporin (antibiotic prescribed for wide variety of infections), the company’s US formulations sales last year increased 94 per cent to Rs 3,403 crore.In the current financial year, he said,  Aurobindo’s overall capital expenditure (capex) plan could be around Rs 400 crore as against a capex  of about Rs 350 crore last year. The company posted a turnover of Rs 7143.5 crore and a net profit of Rs 1,172 crore in 2013-14.