Sun Pharmaceutical Industries Ltd.'s top priority was to bring its Halol facility in India "back in compliance," the Indian generic maker's founder and managing director said.
The Halol facility had received a warning from the U.S. Food and Drug Administration in 2015 for violating manufacturing standards. Remedial steps were taken to address the issues highlighted by the FDA and the company was now awaiting a re-inspection by the agency, Dilip Shanghvi said during an Aug. 11 earnings call.
The Indian drugmaker's quarterly adjusted profit fell to 5.26 billion rupees from the year before. That measure excluded a charge of 9.5 billion rupees involving settlements with some plaintiffs in an U.S. antitrust case over sleep disorder drug Modafinil. Overall sales of the company totaled 61.67 billion rupees.
For the first quarter of fiscal 2018, sales in the U.S. fell 42% year over year to $351 million, accounting for approximately 37% of the company's overall sales, Shanghvi said.
Talking about the year-over-year decline in U.S. revenue, Shanghvi cited three reasons: lower Imatinib sales post the expiry of exclusivity; rising pressure due to customer consolidation; and delays in approval of important products from the Halol facility.
Imatinib is the copycat version of Novartis AG's blockbuster cancer drug Gleevec. Sun Pharma rolled out the generic Feb. 1, 2016, and its exclusivity expired 180 days after that.
Shanghvi said the company needed to "focus on improving execution," which included "getting new product approvals ... from facilities which until now do not have approvals. So, when these facilities start getting approval, we'll start getting the new products from these facilities ... [and] they will also start adding to the top line."
Reiterating the guidance for fiscal year 2018, Shanghvi said it "is likely to be a challenging year," with a "significant decline in our consolidated revenue."
But business is expected to improve later in the year, with the EBITDA margin reaching about 20% to 22% in the second half, Shanghvi said.
As of Aug. 11, US$1 was equivalent to 64.14 Indian rupees.