Caraco Pharmaceutical Laboratories Ltd has posted record third quarterly sales and its first-ever profit, informed Narendra N. Borkar, Chief Executive Officer.
Net income for the quarter ended September 30, 2002 was $406,488, or $0.02 per share, a sharp turnaround from a net loss of $1,525,074, or ($0.09 per share), for 2001's third quarter. Net sales for the third quarter rose 292 per cent to a record $5,899,441, from $1,505,346 a year ago. Gross profit for the quarter was $2,864,102, significantly better than the $440,523 recorded the year before. Operating profit was similarly improved, rising 178 per cent to $783,028, from a year-earlier operating loss of $1,008,371.
Nine-month results were noticeably better, but included an expected net loss of $180,913, or $0.01 per share, a substantial improvement over the nine-month-2001 net loss of $5,131,857, or $0.17 per share.
Buoyed by the introduction of six new products over the trailing five quarters, net sales for the nine months rose 340 per cent to a record $14,828,849, from $3,372,686, a year ago. Gross profit reached $7,380,041, from $468,495, for the year-earlier period. The Company posted an operating profit of $939,189, in stark contrast to an operating loss of $3,621,013, for the first nine months of 2001.
For the nine months, R&D expense was $3,792,771, including a noncash R&D charge of $1,251,200, equivalent to $0.06 per share, for two drug-technology transfers from Sun Pharmaceutical Industries, Ltd. Sun Pharma, India's fifth largest specialty pharmaceutical firm and a major Caraco shareholder, is paid 544,000 shares of Caraco common stock for each drug technology provided to and marketed by Caraco.
Borkar said, "The third quarter was a benchmark for our company, our employees and our shareholders. This was Caraco's first-ever quarter of profitability. Plus, we recorded record sales for the quarter as well as the nine-month period. Nine-month-2002 sales, in fact, exceeded the Company's combined sales from the last four years."
Borkar noted that sales were strong for the entire productline, but especially robust for three of its newer drugs: metformin hydrochloride (generic Glucophage), tramadol hydrochloride (generic Ultram), and carbamazepine hydrochloride (generic Tegretol). Sales of metroprolol tartrate (generic Lopressor) were also strong for the quarter.
Caraco has received FDA approval for eight generic drugs over the past five quarters. All eight are being manufactured and six are being marketed.
These are: ticlopidine hydrochloride, a generic form of Hoffman LaRoche's Ticlid; meperidine hydrochloride, a generic form of Sanofi-Synthelabo's Demerol; metformin hydrochloride, a generic form of Bristol Myers Squibb's Glucophage; oxaprozin, a generic form of G.D. Searle's Daypro; Carbamazepine (chewable), a generic form of Novartis' Tegretol; clonazepam, a generic form of Roche's Klonopin; flurbiprofen, a generic form of Pharmacia's Ansaid; and tramadol hydrochloride, a generic form of R.W. Johnson Pharma Research Institute's Ultram.
He added, "We are optimistic about the fourth quarter, when two of our most-recently-approved FDA drugs -- ticlopidine hydrochloride and meperidine hydrochloride -- will be marketed. The combined US market for these two drugs is about $50 million. As a result of the dramatic sales growth, we are revising upward our sales guidance for the year to $21 million, from the earlier-announced $16 to $18 million range."
He noted that fourth-quarter results will likely include a noncash technology-transfer accounting charge for one new drug from Sun Pharma, and a noncash accounting charge related to the consummation of a new drug- development agreement between Caraco and Sun Pharma. The Company expects the noncash accounting charges for technology transfers to result in a net loss for the fourth quarter. The noncash charges do not affect the Company's cash position or cash flow.
The Company has four drugs pending FDA approval and expects to receive the go-ahead for one or two of these by yearend. The Company also plans to file one additional drug for FDA approval by yearend.