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Lupin eyeing small-size assets in Russian market

Pharma company Lupin on Tuesday said that it is keen to enter the Russian market and is interested in acquiring some small size assets there.

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Pharma company Lupin on Tuesday said that it is keen to enter the Russian market and is interested in acquiring some small size assets there.

Nilesh Gupta, managing director, Lupin, told dna, "The Russian market is a $20 billion in sales, a large market which we can't ignore. We were keen on getting into that market. Obviously, the rouble depreciation is making us think whether we should enter or not. But it is a market we want to be in and the current valuation makes its assets more attractive."

"We are not looking at big acquisition as the intention would be to look for something small – the kind of acquisitions we have done in the pasts. I think we need strong local capabilities to succeed in Russia and from that point an acquisition makes sense," said Gupta.

Besides, the company is also looking at possible acquisitions in Brazil and also trying to expand its presence in Europe.

Meanwhile, the company reported a 26% growth in net profit for the quarter ended December 2014 to Rs 601.45 crore on the back of strong growth in the Indian and emerging markets. During the corresponding of last fiscal, its net profit stood at Rs 476.13 crore. Net sales grew by 5.4% to Rs 3,144.9 crore during the quarter under review compared with Rs 2,983 crore a year ago.

Revenue expenditure on R&D stood at 8.3% of net sales at Rs 260.5 crore during the quarter as against Rs 271 crore during the year-ago period.

The US and Europe formulation sales (including IP) grew by 4% to Rs 1,484.8 crore during the third quarter contributing 47% to overall sales. The company's India formulations business grew by 14% recording net sales of Rs 743.8 crore during the quarter under review.

"Lack of approvals in the US impacted our business during the quarter. There is just one approval in the third quarter. Also, third quarter of last fiscal has been an exceptional quarter. So the growth has been flattish because of this base effect," Gupta said. By the end of this fiscal, the company hopes to clock in an overall growth of 15% and expects similar growth in the next fiscal as well.

Lupin's rest of the world (RoW) sales grew by 35% to Rs 191.3 crore during the quarter, but sales from Japan (Kyowa + I'rom), however, declined by 8% to Rs 342.2 crore.

The company is also awaiting approval for generic of AstraZeneca Plc's heartburn drug Nexium from the US FDA. Gupta said it would be a nice opportunity for the company and expect fairly limited competitions in this space. However, the FDA approval may take 3-6 months, he added.

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