Aurobindo Pharma Reports US$21-mil. Profits in Q2 as Wockhardt Continues to Plummet Into Losses

Aurobindo Pharma Q2 Results

Indian generic firm Aurobindo Pharma's sales for the three months ending 30 September 2009—the second quarter of fiscal year (FY) 2009/10—stood at 8 billion rupees (US$186.9 million), up year-on-year (y/y) by 24.6%. The formulation business was the leading revenue-generator for the firm, contributing 49% of gross sales, on account of the firm's strong U.S. and anti-retroviral generics business. Active pharmaceutical ingredients were next at 46% of the gross revenue contributions due to the sale of semi-synthetic penicillin (SSP) and cephalosporin bulks drugs.

Total expenditure for the quarter stood at 7 billion rupees, an increase of 16.2% y/y. The higher growth in sales compared to expenditure, and a foreign-exchange gain of 55.4 million rupees, has seen Aurobindo Pharma report operational and net profits of 1.7 billion rupees and 1 billion rupees respectively over the period in question.

Sales for the first six months of the FY 2009/10 stood at 17 billion rupees, an increase of 24.6% y/y. Operating profit and net profit over the same period stood at 3.3 billion rupees and 2.7 billion rupees respectively.

Wockhardt Q3 Results

Meanwhile, Aurobindo Pharma's domestic counterpart Wockhardt's financial results are not so promising. Over the third quarter this year, the latter's sales stood at 9.2 billion rupees, up y/y by a mere 2.2%. Total expenditure stood at 7.4 billion rupees, an increase of 4.6% y/y. The firm has reported mark-to-market losses of 2.84 billion rupees for the quarter, pushing the company into loss. Losses before and after tax stood at 415 million rupees and 579 million rupees. Over the three months under review, losses on both these parameters have grown by 146% and 198% y/y respectively.

Outlook and Implications

The quarter in question has been another promising one for Aurobindo. Reduction in expenditure and foreign-exchange gains have seen the firm report profits, after losses in the corresponding quarter in FY 2008/09.

The United States has always been a strong market for Aurobindo Pharma, and the quarter in question is no exception. New launches, such as generic carisoprodol, risperidone, and an additional dosage form of zidovudine have boosted sales of this segment over the quarter. Other new launches included generic amlodipine besylate and metformin in Switzerland. In the future, although the firm's large and growing generic portfolio guarantees revenues, sales in South Africa will be dampened by the loss of a US$400-million tender and the entry of other generic firms into the abacavir market. However, the recent acquisition of Trident Life Sciences as part of a venture into injectables will boost the firm's sales over the medium-to-long term.