MUMBAI India's Dr Reddy's Laboratories Ltd said it expects to launch more than 10 products in the United States this year and hopes business there will improve as it caps off what it termed as a "particularly bad year" marked by regulatory rebukes.
At least four of the country's second-largest drugmaker's factories are under U.S. scrutiny for violation of standard manufacturing practices, and Chief Operating Officer Abhijit Mukherjee said on Friday that drug approvals remain challenging.
"The timeline for review of complex products and subsequent approvals from (the U.S. Food and Drug Administration) have been getting deferred," Mukherjee said on a conference call with analysts, hours after Dr Reddy's reported a lower-than-expected fourth-quarter profit. "We continue to work with the agency and remain optimistic about the remaining approvals."
The company reported a 19 percent drop in fourth-quarter revenue from North America, its largest market, as it struggles to fix problems at three of its India plants that received a warning from the FDA in November 2015 for quality control violations. Last month Dr Reddy's was issued a notice of concerns at another plant, in Bachupally in southern India, which accounts for over 60 percent of its U.S. drugs revenue.
"In our view the (FDA's) observations at Bachupally are procedural and we will deal with the necessary interventions," Mukherjee told analysts on Friday. He said the company has already remediated most of its plants, so it does not expect to spend much on that going forward.
In emerging markets the company said it expects this fiscal year to launch more biosimilar drugs, which are typically high-margin products with less competition.
In India, where the company's revenue rose 8 percent in the January-March period, Dr Reddy's expects revenue to grow between 10 and 12 percent annually this year, Mukherjee said.
The company reported a fourth-quarter net profit of 3.38 billion rupees ($52.56 million) earlier in the day, missing analysts' consensus forecast of 4.27 billion rupees, according to Thomson Reuters I/B/E/S.
This was, however, significantly higher than the 1.23 billion rupee net income the company had reported a year earlier, when it was hit by a charge related to loss of payments in Venezuela.
($1 = 64.3050 Indian rupees)
(Reporting by Zeba Siddiqui; Editing by Subhranshu Sahu and David Evans)