Lupin Sees U.S. Pain Till 2020, Bets On Women’s Health To Offset Pricing Fall
Lupin says pain from price erosion to continue for the next two years.
Indian pharmaceuticals company, Lupin Ltd., is betting on its branded women’s health specialty product, Solosec, to offset pricing pressure in the U.S. market.
“Solosec is, by far, the most important product in our portfolio,” Nilesh Gupta, managing director at Lupin told BloombergQuint on the sidelines of an annual quality forum organised by trade group Indian Pharmaceutical Alliance (IPA) on Friday. The company sees the drug for bacterial vaginosis as a “big opportunity” and is working towards a sales target of $100 million for the oral granules.
The company’s branded business, which makes for 13 percent of its U.S. sales, rose 25 percent to $28 million in the quarter ended December, compared to the corresponding quarter last year. The branded portfolio is expected to grow next year as well, said Gupta.
Other new products such as Tamiflu generic which got a U.S.FDA approval on Feb. 21, along with levothyroxine, Ranexa generic and Axiron generic will also be launched in the U.S. by fiscal 2019. Lupin plans to launch a total of 20-30 new products over the next year.
The company’s gross margins declined by nearly 10 percent in the quarter-ended December, compared to the same period in the previous year. This, as the company saw price erosions in most of its base generic drugs in the U.S., especially for its Metformin franchise. “The pain will continue for the next two years,” according to Gupta.
Next year we are looking at a high single-digit pricing erosion in the U.S.Nilesh Gupta, Managing Director, Lupin
The company will look to partially offset the price erosion through its branded specialty business which has higher margins.
“Margins will improve over time and meaningful improvement will happen after two years when the complex generic and specialty portfolios develop,” said Gupta. The company is not getting any new growth from complex generics in the the next year, but some products in the inhalation and injectable portfolio are likely to be launched in fiscal 2019, he said.
Impact Of Warning Letters
Lupin received warnings letters for its Goa and Indore facilities on November 6, 2017, from the United States Food and Drug Administration (U.S. FDA). This may further weaken the company’s growth as product approvals from these sites will get delayed.
“When you are issued a warning letter, the products do get stuck at these sites,” said Gupta. While there are plans to selectively move some products to other locations, the quickest resolution to the issue will be dealing with the warning letters. “I think we will have a speedy resolution.”