Dr Reddy's Laboratories today said its net profit for the quarter ended September 30 fell by 60 per cent to Rs 308.9 crore due to decline in sales in overall markets and pricing pressure in its key North American market.
The company had reported a net profit of Rs 774.7 crore in the same period last year.
The total revenue of the Hyderabad-based company too came down by 10 per cent at Rs 3,616 crore against Rs 4,020.7 crore during the corresponding quarter a year ago.
"US FDA warning letter has hit the new product launches in the USA. That has affected the performance. However, we did well when compared to quarter on quarter sequentially. We are coming back to normal," Saumen Chakraborty, president, CFO and Global Head of HR, DRL, told reporters here.
Revenues from North America, the strong bastion of the drug maker, witnessed 13 per cent decline from generic sales to Rs 1,610 crore primarily on account of increased competition in Valgancyclovir and injectable franchise, coupled with pricing pressure and moderation in volumes off-take, he said.
During the quarter under discussion, the company has launched four new drugs in the region.
Revenues from the emerging markets was down by 27 per cent at Rs 480 crore against Rs 661 crore during the second quarter of 2015-16, while European market declined by 16 per cent to Rs 178 crore against Rs 212 crore in the second quarter of 2015-16.
Replying to a query, DRL Chief Operating Officer Abhijit Mukherjee said the company has put in place all the systems suggested by the US FDA with regard to the warning letter it received and sent a formal letter to the agency for an inspection.
On the market expansion, Mukherjee said the company had already entered Columbian market and has plans to enter into Brazilian market soon.
Pharmaceutical Services and Active Ingredients vertical declined by 2 per cent year-on-year to Rs 580 crore in the second quarter of the current fiscal while on sequential basis it registered a 23 per cent growth.
Mukherjee further said the Health Canada authorities
have recently inspected one of the plants which received US FDA warning letter and satisfied that it was compliant to that country's standards.
As on September 30, cumulatively 85 generic filings are pending for approval with US FDA (83 ANDAs, 2 NDAs). Out of them Dr Reddy's believes that 19 drugs have "first to file" status.
The company spent Rs 520 crore on research and development during the quarter.
