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Aurobindo to cut debt by up to $100-125 million; net profit jumps five-fold

LiveMint logoLiveMint 09-06-2014 Viswanath Pilla

Hyderabad: Hyderabad-based drug maker Aurobindo Pharma Ltd on Monday said it plans to repay $100-125 milllion debt in the year ending March 2015.

Aurobindo had a net debt of Rs3,215 crore or $537 million as on March, 2014. The company said it has repaid $67 million of debt during the year ended March 2014. It is also planning to spend around Rs400-500 crore on capital expansion.

Aurobindo posted a five-fold rise in net profit at Rs501 crore in the fourth quarter ended 31 March, 2014, compared with Rs108 crore in the year-ago period, driven by growth in generics sale and a 180-day exclusivity of anti-depression drug Cymbalta in the US market.

The total revenue grew 48.4% to Rs2,329 crore.

For the full year, net profit rose four times to Rs1,173 crore, while total revenue grew to Rs8,100 crore (Rs5,855 crore).

Aurobindo said it’s confident of maintaining 22-23% growth in base business despite the end of Cymbalta’s market exclusivity on back of strong growth in injectables, new product launches and the relaunch of antibiotic Cephalosporin products.

Cymbalta’s 180-day exclusivity period is expected to end on Monday, paving the way for the entry of many generic players, resulting price erosion.

The company did not disclose the gains it made on Cymbalta. According to estimates of Mumbai-based brokerage house Prabhudas Lilladher Pvt. Ltd, the drug contributed about $95 million revenues, out of Aurobindo’s $577 million US sales in 2013-14.

Cymbalta has sales of around $4.5 billion in the US, but the market size is shrinking with the entry of several generic players including Aurobindo, Dr. Reddy’s Laboratories Ltd, Lupin Ltd, Sun Pharmaceutical Industries Ltd, Teva Pharmaceutical Industries Ltd and Torrent Pharmaceuticals Ltd.

Aurobindo acquired the eastern European commercial operations of world’s second-largest generic drug maker Actavis Plc in January this year for $41 million.

Aurobindo plans to be among the top 10 generic players in Europe in the coming years, once Actavis is fully integrated.

“Over the next 18-24 months, we will try to bring some products in-house to take advantage of our lower API and manufacturing costs,” said Arvind Vasudeva, chief executive officer of Aurobindo in an earnings conference call.

Aurobindo also expects a couple of para-IV launches in FY17 in the range $20-30 million.

Aurobindo has so far filed 336 abbreviated new drug application (ANDAs) as on March 2014, of which it has received 155 final approvals and 26 tentative approvals. The balance 145 ANDAs are under review.

Shares of Aurobindo rose 0.64% to close at Rs652.35 on the Bombay Stock Exchange, while the benchmark Sensex rose 0.72% to end at 25,580.21 points.

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