Lupin reported a 55 per cent jump in profit, driven by healthy performance in key markets such as the US and India. CEO Vinita Gupta shares her perspective on the drivers for the business, going forward. Edited excerpts from a telephone interview.

Lupin’s US business has been the key driver this quarter. Could you tell us how the US generics and branded sub-segments fared?

The overall revenue growth in the US was 21 per cent. While the generics business grew 24 per cent, the branded business declined marginally. New products launched during the second half of last year such as eloxatine, niaspan and doxycycline have helped. Products launched during the quarter such as the generic version of oral contraceptive brand Yaz will contribute to the revenues in the forthcoming quarters.

How do you see the US generic business shaping up in the near future?

We are optimistic about the prospects of our generics business. We have a pipeline of over 200 products filed, out of which 100 are pending approval which includes 31 exclusive products (first-to-file generics). Portfolio evolution, through launch of exclusive, limited competition and high-value drugs have helped Lupin improve its operating profit margin significantly over the past years. Going forward, we will continue with this strategy. Over the next three years, we are looking to bring a larger portfolio of ophthalmic and dermatology drugs into the market.

We have also commenced filing for controlled substances, which will come to the market three years from now. We are in the process of building our own facility for controlled substances in Maryland, US; the opportunity in this space is about $2 billion.

Also, the inhalation products that we have filed in the last few years may be launched over the next four years. A strong pipeline should help scale up our generics revenues and profitability.

What’s the strategy for your branded business, which has remained stagnant for the last several quarters?

The branded business has had a challenging few quarters. Our anchor product suprax has really matured, but we are trying to manage its lifecycle to sustain long-term growth. For instance, we’ve moved prescriptions from the tablet form to capsules dosage form.

We’ve put in a lot of effort on the newer dosage forms and that is showing results. Similarly, other in-licensed brands such as Alinia are also growing.

So, the focus is on managing the lifecycle of exiting brands, growing them and identifying partnering and acquisition opportunities. These should drive growth over the next three years, until we get our own proprietary products into this market.

How sustainable is the increase in operating profit margin from 25 per cent until two quarters ago to 30 per cent now?

The attempt has been to stabilise it at the 30 per cent level in the near term. With the changing business mix and increasing contribution from better margin products such as complex generics and biosimilars, we hope to grow our margins from here.

What’s your outlook for the domestic market, given the recent regulatory changes?

We are trying our best to grow our business despite challenges and our team is working hard. We expect to sustain 20 per cent plus revenue growth both in India and at the overall company level.

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