Ipca Labs sees malaria drug sales double in 3 years

25 Jul 2008
Reuters UK
Ipca Laboratories sees its malaria drug sales doubling in three years, helped by World Health Organization (WHO) pre-qualifications, its chief said after the firm posted a 32 percent fall in quarterly net profit.

In FY08, Mumbai-based Ipca made 2 billion rupees from malaria drug sales, Managing Director Premchand Godha said at a press meet to discuss the company's quarterly results on Friday.

Pre-qualification acts as a guide to help countries and United Nations agencies select suppliers for drugs.

Ipca already has pre-qualification for two malaria drugs, artesunate and a combination drug of artesunate and amodiaquine, and is expecting WHO approval for another artemether-lumafantrine combination.

"We see a very large scope for malaria drugs with the fundings that are available from global agencies," Executive Director A.K. Jain said.

Global procurement of artemether-lumafantrine amounts to $300 million, and even a small share of that would be a huge opportunity for Ipca, Jain added.

Last week, the Clinton Foundation HIV/AIDS Initiative struck deals with larger rival, Cipla, and Ipca to cut prices on artemisin-based combination (ACT) drugs for malaria, particularly artemether-lumafantrine and artesunate and amodiaquine.

Artemisin is a plant extract whose prices have been fluctuating wildly in the past four years.

"I only see increased business coming our way after this," Godha said.

The Clinton Foundation said that about 100 million doses of ACT are distributed a year now and expects this demand to at least double over four years and could even cross 400 million doses annually if a global subsidy plan is agreed.

PROFIT HIT, FORECAST MAINTAINED

Earlier in the day, Ipca reported net profit of 236.3 million rupees for April-June, hurt by notional foreign exchange-related losses of 176.5 million rupees booked on its borrowings totaling about $50 million.

In the year-ago quarter, Ipca's 347.2 million rupees profit was bolstered by a forex gain of 136.5 million rupees.

However, Jain maintained his earlier full-year outlook for 18-20 percent revenue growth and an operating margin of about 20 percent. Net sales for the quarter rose 18 percent to 2.95 billion rupees, boosted by a 40 percent rise in exports.

The rupee's 6.8 percent fall against the dollar in April-June has depressed profits of several firms with external borrowings.

Ipca shares ended 0.5 percent lower at 540.35 rupees in a Mumbai market that fell 3.4 percent.

http://uk.reuters.com/article/health/idUKBOM24162420080725?pageNumber=2