Indian pharmaceutical company Zydus Cadila's net revenue stood at INR98.376 billion (USD14 million) in the fourth quarter of fiscal 2015/16, up 14 % year on year(y/y).
Implications | Zydus Cadila managed to increase its net income by 14% y/y, reflecting the success of the company's effective investment in novel drugs, biosimilars, and generics in the market. |
Outlook | Marketing approval of the company's pipeline of abbreviated new drug applications (ANDAs) is anticipated to be the main revenue driver in the short to medium term, although originator and biosimilar medicines are expected to make a potential contribution in the long term. |
Indian generics producer Zydus Cadila has reported financial results for the fourth quarter of the 2015/16 financial year showing total net income of INR98.4 billion (USD14 million), representing 14 % year-on-year (y/y) growth. Zydus's financial year runs from 1 April to 31 March the following year.
For the year ended 31 March 2016, the company reported net profit of INR15.226 billion, up 32% y/y from the equivalent quarter of the 2014/15 financial year.
Operating margin for the current period, at 53%, expanded by 6% y/y.
INR, bil. | Y/Y, % change | |
Net income | 98.376 | 14 |
Cost of sale | 20.362 | 7 |
Sales, marketing, and administration expenditure | 25.725 | -4 |
Operating income * | 52.289 | 29 |
Operating margin ** | 53 | 6 |
* IHS Life Sciences estimate: net revenues minus cost of sales, general, and administrative expenses. Does not include other operating income/expenses, investment income, and financing costs. ** IHS Life Sciences estimate: operating income as a percentage of net sales. Source: Cadila | ||
Outlook and implications
The strong growth in revenue, net profit, and operating margin for this financial year and specially the last quarter was driven by US market sales. This market contributes 40 per cent to company's revenues, and growth in the United States has nearly doubled in the past five years. In the first quarter of the 2015/16 financial year, the company launched 12 products in India and filed six abbreviated new drug applications (ANDAs) in the US (see India: 14 August 2015: Zydus Cadila reports 22% y/y growth in Q1 revenues), and launched 16 new products during the second quarter of the fiscal year, with 13 in India and two in Mexico (see India:22 October 2015: Zydus Cadila reports 17% y/y income growth in Q2 2015/16). In total, the group had filed 38 ANDAs with the US FDA in the 2015/16 financial year, taking the increasing filings to 260, while it received eight ANDA approvals during 2014/15, taking the total to 99 product approvals. The firm did not report its sales in other geographies.
Cadila announced earlier this year its plans to strengthen the development of originator drugs and biosimilara (see India: 29 April 2015: Zydus Cadila to focus on NCEs and biosimilars). Looking to the immediate future, the company's success will depend primarily on the launch of generics in the US market, before biosimilars and new chemical entities (NCEs) begin to make a significant impact on its profits.