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Wockhardt Q4 net plunges 77% on import bans

Tuesday, 27 May 2014 - 7:40am IST | Place: Mumbai | Agency: dna

Drugmaker Wokhardt, on Monday, reported a 77% drop in its net profit to Rs 74.45 crore during the quarter ended March 31, 2014, on the back of import alerts received from the international regulators. The company reported a net profit of Rs 334.76 crore during the corresponding period of the previous year. Total income from operations during the period under review declined to Rs 1,038.67 crore from Rs 1,485.50 crore, a drop of 30%.

Net profit for the year 2013-14 decreased by 47% to Rs 840.71 crore from Rs 1,594.12 crore during the previous year.

The company received import bans from both USFDA and the United Kingdom Medicines and Healthcare products Regulatory Agency (UKMHRA) on its Aurangabad and Daman facilities. In May last year, the company's Waluj facility at Aurangabad received import ban over non-compliance to good manufacturing practices. Its Chikalthana facility at Aurangabad and Kadaiya facility at Daman also came under regulatory scanner.

According to a pharma analyst with a Mumbai-based broking company, "The drop in net profit was expected. Three of its units are under ban and which are selling to the US and UK markets. The few products which have been given a respite by the foreign regulators comprise a very small amount. There is a double whammy for the company. While the overall sales in the US market is affected, there is remedial costs which is adding to its woe."

The company, during the quarter, increased its research spend significantly which stood at 9.7% of total sales at Rs 101 crore. Including capital expenditure, total R&D spend accounted for 10.7% of sales during the quarter.

Wockhardt filed 10 new product applications with the United States Food and Drug Administration (USFDA) during the quarter taking cumulative filings pending approval to 62. The company also filed for 134 patents during the quarter taking the cumulative filings to 2001 and has been granted 17 patents during the quarter taking the cumulative patents granted to 259.

The company's international business contributed 79% of the total revenues during 2013-14. Wockhardt's US business declined by 26% during the fiscal and contributed 45% of the global revenues. The UK business recorded a growth of 3% while the Irish market recorded a drop of 15%. India business, on the other hand, grew marginally at 2% during the year, while the emerging markets business (including India) declined by 3% in 2013-14. The company launched 26 new products in the domestic market during the fiscal.

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