What Lupin Is Telling Shareholders In Its Annual Report

With FY17 seeing the highest ever investment in Research and Development (R&D) drugmaker Lupin Ltd. plans to focus on complex generics and speciality products going forward.

In its annual report, the company says that that while its U.S. subsidiary Gavis Pharmaceuticals is currently net-worth negative and making losses, it expects Gavis’ networth to improve in the near future.

Here are some of the key highlights of the report:

• Generic pharmaceutical drug makers are at an inflection point due to a slowdown in opportunities and lower prices.
• Lupin will focus on complex generics and speciality products going forward.
• The financial year ended March 2017 (FY17) saw the highest-ever investment in research and development (R&D) by the company.
• Lupin currently has 45 first-to-files (FTF) with 23 exclusive FTF opportunities
• Competition in exclusive and semi-exclusive products heightened generic pricing pressure.
• R&D expenses are at 13.5 percent of global annual revenues.
• Political changes in the United States have increased scrutiny of drug pricing
• U.S.-based subsidiary Gavis Pharmaceuticals, an acquisition that was completed in 2016, incurred losses in FY17 and is net-worth negative.
• The management sees improvement in Gavis' net worth over a period of time.
• Lupin Europe, Nanomi BV and Lupin Canada are loss making.

The stock has underperformed the benchmark S&P BSE Sensex index in 2017. While the index has gained 17.78 percent during the year, the stock has fallen 24.73 percent during the same period.