By Kashish Tandon and Rishika Sadam
BENGALURU/HYDERABAD (Reuters) – Cipla, India’s No.3 generic drugmaker by sales, reported a better-than-expected quarterly profit on Friday, boosted by strength in its key domestic and North American businesses.
The results come at a time when Cipla’s founding family is looking to sell their 33.4% holding in the drugmaker. However, Cipla Chief Executive Umang Vohra played down the deal talk.
“The promoters are one entity and the company is another. We have not heard anything either way in terms of the transaction as yet,” Vohra said at a press briefing.
Reuters reported last month that rival Torrent Pharmaceuticals was in talks with private equity funds to raise up to $1.5 billion to bid for the drugmaker.
Amid the deal talk, Cipla’s healthy quarterly results raised hopes for the country’s wider pharmaceutical sector, which is the world’s largest supplier of low-cost generic medicines.
Consolidated net profit rose 43.4% to 11.31 billion rupees ($135.90 million) in the second quarter, topping the analysts’ average estimate of 9.75 billion rupees, according to LSEG data.
“The strong Cipla numbers have set a positive tone for the large pharma results for the remainder of the quarter,” said Shrikant Akolkar, an analyst at Asian Markets Securities.
Total revenue from operations rose nearly 15% to 66.78 billion rupees. Sales in North America climbed nearly 32%, while those in India and South Africa rose 10% and 3.7%, respectively.
CEO Vohra attributed the strong sales growth in North America to higher demand and growing market share of Lanreotide injection – used to curtail tumour growth – and asthma medication Albuterol.
The company’s domestic sales rose due to price hikes and the addition of medical representatives, according to analysts.
Peer Dr Reddy’s Laboratories also reported quarterly results above analysts’ expectations, fuelled by strong U.S. sales of its generic version of the popular cancer drug Revlimid.
Cipla’s shares closed 2.03% higher on Friday after the results. They have risen nearly 17% in the September quarter, outpacing a 12% rise in the Nifty Pharma index.
($1 = 83.2210 Indian rupees)
(Reporting by Kashish Tandon in Bengaluru and Rishika Sadam in Hyderabad; Editing by Eileen Soreng)