Price erosion in US drags Alembic Pharma's Q3 net down 40% to Rs 176 cr

While the firm's US business fell 23% to Rs 393 cr in Q3FY22, its API sales were down 7% to Rs 198 crore

Sustained price erosion in its US business, coupled with a dip in its active pharmaceutical ingredients (API) sales, Alembic Pharmaceuticals Ltd (APL) has posted a 40 per cent fall on a year-on-year (YoY) in its net profit for the quarter ended December 31, 2021.

The company registered a net profit of Rs 176 crore for Q3FY22 as against Rs 293 crore in Q3FY21. Total sales for the quarter fell by three per cent to Rs 1,272 crore, down from Rs 1,314 crore in the said quarter last year.

While APL's US business fell by 23 per cent to Rs 393 crore in Q3 of FY22 from Rs 512 crore in Q3 of FY21, API was down seven per cent to Rs 198 crore in the same period from Rs 214 crore last year's third quarter.

APL filed six abbreviated new drug applications (ANDAs) during the quarter, taking the cumulative filings to 220 even as four ANDAs were approved in Q3 of FY22 including two tentative, leading to 154 cumulative ANDA approvals including 20 tentative. The company also filed one drug master file (DMF) in the quarter.

Commenting on the US business, Pranav Amin, managing director (international business), APL, said that while it was the price erosion that dragged down US sales, sequentially the decline has been reducing with business returning to a healthy normal. "Sequentially the price erosion is now slowing down. Also, despite the recent erosion, the US has given us scale in the long run given that we have achieved a CAGR of 25 per cent in the US in the last five years," Amin added.

Amin stated that the company has sent responses to USFDA for one of its upcoming plants where the regulator had raised a query, following which it anticipates approvals in near future. On the other hand, APL is also awaiting USFDA approvals for other plants that would see the company launch injectables in the US.

APL's Ex-US and India business, however, grew 13 per cent and 17 per cent during the quarter, respectively. While Ex-US grew to Rs 193 crore in Q3FY22, India branded business grew to Rs 488 crore on the back of a faster-than-Indian Pharmaceutical Market (IPM) sales growth in acute and chronic products.

"India branded business has posted a strong growth rate for the third consecutive quarter. Strong operational performance is attributed to consistent efforts of the team and strengthening of customer relationships. Branded business witnessed market outperforming growth across most of the key products and therapy areas," said Shaunak Amin, Managing Director, Alembic Pharmaceuticals Limited.