FY18 will be challenging for Lupin: Nilesh Gupta

Interview with Lupin managing director Nilesh Gupta

Drug maker Lupin posted flat revenue growth and lower profit in the fourth quarter as the business came under pressure in the US market. Lupin managing director Nilesh Gupta tells Aneesh Phadnis that the company will face challenges in FY18 but will clock growth in the following year on the back of new launches. Excerpts:

Lupin's fourth quarter revenue growth over a year ago was flat and the same declined sequentially. What went wrong?

We had indicated earlier that sales will be muted. We have seen competition in Glumetza, which is among our top-selling diabetes drugs. We continue to see meaningful opportunity in the product but sales will be lower. We launched Glumetza in February 2016 and that contributed to growth in the fourth quarter of the last financial year. On a full-year basis, there has been healthy growth. Our US sales grew 36.5 per cent in dollar terms and crossed $1-billion mark in FY17. 

What’s your outlook for the US market?

We expect pricing pressure to heighten. Earlier, we had said price erosion would be in mid single-digit and now we see it in high single-digit. We do not give guidance (forecast) but can say growth will be muted in FY18. It will be a challenging year from growth perspective. We see growth returning in FY19 on the back of new product launches, Ranolazine, Minocycline ER, and Moviprep. In FY18, we will be launching 30 products.

US President Donald Trump has proposed big cuts in government funding for Medicaid programme. What impact do you see?

It is too early to assess the impact of the announcement.  

Are you witnessing destocking ahead of Goods and Services Tax rollout?

Wholesalers and retailers are keeping inventory low. Last month, secondary sale (wholesalers selling to retailers) was higher than the primary sale and this is unusual. But, we expect domestic sales to lift off in the first quarter of FY18.