Novartis India has posted better performance during the first quarter ended June 2008 with the help of higher sales in generics, pharmaceutical and animal health divisions.
The company's net profit increased by 29.8 per cent to Rs 29.64 crore from Rs 22.84 crore in the corresponding period of last year. Its profit before tax also moved up by 32.6 per cent to Rs 46.75 crore from Rs 35.2 crore. Its net sales increased by 10.7 per cent to Rs 153.68 crore from Rs 138.83 crore.
The pharmaceutical sales increased by 9.9 per cent to Rs 105.19 crore during the quarter under review from Rs 95.75 crore on account of higher sales of key brands and its generics sales increased sharply by 33 per cent to rs 18.71 crore from Rs 14.07 crore due to higher tender sales. The sales of Animal health division went up by 20.8 per cent to Rs 11.22 crore. However, OTC sales declined by 5.9 per cent to Rs 18.56 crore from Rs 19.72 crore due to stiff competition.
Meanwhile, addressing the 60th annual general meeting, the new chairman Dr Peter Jager told shareholders that the Novartis AG has purchased an additional 51.7 per cent stake in Speedel Holding Ltd. and plans to acquire the remaining shares in the Swiss biopharmaceutical company. Speedel's pipeline targets hypertension and builds on the promise of direct renin inhibitors seen with Tekturna/Rasilez. The company is planning to introduce these product is India also.
Ranjit Shahani, vice chairman and managing director told shareholders that the company has raised strong objection regarding the Government's proposal to bring 354 drugs under price control. He told that if the government will go ahead with the proposal of bringing 354 products under price control, then Novartis will have around 70 per cent of its sales under DPCO. Currently, around 20 per cent of company's sales are coming under price control. The price reduction of Tegrital by government and increased competition for its key brands Sandimmun Neoral and Visudyne, put pressure on pharmaceutical sales during 2007-08.
Commenting on the future performance, Shahani said that the government's decision to increase investment in healthcare will boost the business outlook. However, uncertainty related to the unprecedented delay in introduction of the drug policy is putting pressure. The Group of Ministers set up by government for drug policy is yet to make their recommendations. He added that the pharmaceutical industry also has serious concerns about the grant and enforcement of patents for innovative drugs in India and seeks clarity from government on these issues.
Shahani told shareholders that the government must establish clear policies and guidelines on both grant and enforcement of patent. This current environment is a cause for concern with respect to future investments in innovation and research in India.