Problems at Lupin’s plant in Goa, India, hit the drugmaker’s latest earnings with a double whammy, undercutting its U.S. sales while raising costs to deal with remediation efforts there.
The Mumbai-based drugmaker Wednesday reported revenues in North America, its biggest market, that fell in its fourth quarter ended March 31. Revenues fell 13% to 19 billion rupees ($293.4 million) from 21.9 billion rupees ($338.6 million) in the same quarter a year ago. Sales in the area accounted for 48% of its total in its fiscal year ended March 31.
Lupin's net sales for the year were up 24.4% to 171.2 billion rupees ($2.6 billion), lifted by growth in its revenues in India.
Much of the hit in North America can be attributed to competition to its generic diabetes products in the U.S., Reuters reported. Pricing pressure on generics, and on diabetes medications, have been hard on drugmakers in the U.S.
But the company also had earlier projected it would introduce more products in the U.S. market, a plan that has been affected by its manufacturing problems at its plant in Goa, which was hit by an FDA Form 483 last year.
Related: Lupin plant in Goa smacked by the FDA
The Goa plant was expected to be the main source for about a dozen new products the company expected to launch in 2016. The company successfully launched nine new products in the U.S. in the last fiscal year.
Executivess last fall said they had hoped to get its problems at the plant resolved soon, which would allow it to again launch new products from the facility
Related: Lupin leader crosses fingers for fast resolution of Form 483
But with manufacturing costs up 27.9% in Q4 in the face of regulatory concerns, the company saw its operating profit fall by nearly half to 3.80 billion rupees ($58.63 million).
To beef up its U.S. market share, the drugmaker in 2015 laid out $880 million to buy GAVIS Pharmaceuticals, a small U.S. generics maker that specializes in niche products including dermatology controlled substances. It then invested about $20 million in its plant in Somerset, New Jersey, and recently began shipping products from the 150,000-square-foot manufacturing facility. It said the expansion will allow for a 10-fold increase in production.