Strides Arcolab third-quarter profit slumps 93%

Forex losses and a delay in regulatory approvals led to the slump

Strides Arcolab Ltd's September quarter profit plummeted on forex losses and a delay in regulatory approvals but the Indian drugmaker stood by its revenue forecast of Rs 1,000 crore for the year.

The company said it had 18 pending approvals with the US FDA and it expected to get nod for some of these products in the current quarter ending December.

"In spite of a subdued quarter and delay in product approvals for the US market, the company is confident of meeting its guidance for the year," Arun Kumar, group CEO, said in a statement.

Strides said its net profit fell 93% in July-September to Rs 2.2 crore on net sales of Rs 199 crore. It had a foreign exchange loss of Rs 7 crore in the period.

Its consolidated pharma revenue stood at Rs 709 crore for the nine months ended September, while earnings before interest, tax, depreciation and amortisation (EBITDA) for the period was at Rs 140 crore. The full-year EBITDA outlook is Rs 200 crore.

Strides said in September a plant of its unit Agila Specialties Private Ltd had received a warning letter from the U.S. FDA after an inspection in June.

On Thursday, it said the company took "various voluntary remedial actions to address the concerns raised by the US FDA and has responded suitably within the stipulated timelines."

India's drugmakers have come under closer scrutiny this year as the FDA, the guardian of the world's most important pharmaceuticals market, has increased its presence in the country, reflecting India's growing importance as a supplier to the United States.

India produces nearly 40% of generic drugs and over-the-counter products and 10% of finished dosages used in the United States. In March, India allowed the FDA to add seven inspectors, which will bring its staff in India to 19 - a move that should ultimately bolster the quality of and confidence in Indian-made drugs.

Strides' transaction with Mylan Inc is expected to close by December, the company said.

Mylan agreed to buy Agila for $1.6 billion in February to expand its presence in the fast-growing injectable drugs market.