Lupin Has Room To Borrow $1 Billion For Buyouts In Women’s Health, Paediatrics

Lupin Ltd. is looking for acquisitions in women's health and paediatrics categories as the generics maker seeks to cut dependence on two products for bulk of its sales in the U.S., its largest market.

The drugmaker has earlier “professed interest” in the two segments and there are quite a few companies in the market, Ramesh Swaminathan, chief financial officer and executive director, told BloombergQuint in an interaction. “Lupin’s balance sheet has the capacity to borrow $1 billion for acquisition of these assets.”

Lupin’s profit fell the most in the quarter ended June amid increased competition in the U.S. and disruption caused by the Goods and Services Tax. Pricing pressure in the U.S., which contributes 45 percent of its sales, meant the share of its two key drugs –Fortamet and Glumetza – declined. That prompted it to lower its operating margin forecast.

Watch the full interview here.

The U.S. business has reported a rather lacklustre performance, mainly because of price erosion, Swaminathan said.

For the next financial year, the company has a “very rich pipeline” of products, he said. Normalcy will return only in the year to March 2021, he said. Drugs like Levothyroxinem and Ranex can come in next year and Lupin will also focus on complex generics, biosimilars and specialty businesses.

The generics maker received observations for its Goa and Indore plants over manufacturing practices. Swaminathan said the company has “answered all queries”.

Shares of Lupin are more than 32.6 percent down year to date, making it the worst performer in the Nifty Pharma Index that has declined 10.7 percent. Nearly half the analysts tracked by Bloomberg have a ‘Buy, rating on Lupin.

Demand Back After GST

GST had a “tremendous impact” on the business in India ahead of its rollout, Swaminathan said. Normalcy returned in July; August and September have been good as demand was back, he added.