Dr. Reddy`s Laboratories Ltd said its first-quarter profit more than halved from a year ago, as regulatory hurdles and pricing pressures in its biggest market, the United States, dragged on the drugmaker`s earnings.
Export-driven Indian drugmakers have been working on making high-value complex generics to offset growing competition in the United States. But their ability to negotiate on prices has been hit by consolidation among drug distributors. Compounding their woes is U.S. regulatory scrutiny of foreign manufacturing sites that has led to bans on many plants over quality control issues.
Dr. Reddy`s, among India`s top 5 drugmakers, on Thursday posted a net profit of 666 million rupees ($10.39 million), versus 1.54 billion rupees a year ago. (http://bit.ly/2v0Cmee)
Results were below expectations due to lower contribution from new product launches in the United States, said the company`s co-chairman and CEO, G.V.Prasad.
The implementation of a new tax structure in India also dragged, Prasad added, referring to the Goods and Service Tax that was unveiled on July 1 in what is the country`s biggest tax reform in the 70 years since its independence.
Revenue from the company`s global generics business in North America fell 4 percent to 14.95 billion rupees in the quarter, while revenue from India dropped 10 percent.
($1 = 64.1225 Indian rupees)
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
