Caraco Pharmaceutical Laboratories, a Detroit based subsidiary of Sun Pharmaceuticals, suffered setback during the quarter ended September 2005 mainly due to heavy investment in R&D and stiff competition. It incurred a net loss of US$ 4.82 million as against a net profit of US$ 1.06 million in the corresponding period of last year. The company’s net sales, however, improved by 29.4 per cent to $ 19.80 million from $ 15.30 million. It’s earning per share worked out to negative $ 0.18 as compared to $ 0.05 in the last period.

Daniel H Movens, CEO, Caraco, said, “Our current operating ash position continues o allow us to be free of debt, though depending on our expansion needs, we may need to facilitate a short-term loan to augment our working capital. Our working capital position has consistently improved up from $ 4.8 million to $ 28.8 million as at the end of second quarter of 2005-06.”

The company filed three ANDAs in second quarter resulting in a total of 13 ANDAs pending US FDA approval.

Movens further stated, “We continue to look at expansion opportunities to support our growth expectations and benefit our company by increasing capacity and streamlining production, ultimately improving efficiencies in every area of the company. We expect the trend of increased sales to continue during the FY 2006. Regardless, pricing pressures, due to increased competition, that have been on the rise during fiscal 2005, are expected to continue in FY 2006, which could result in lower growth rates and gross margins.”

Caraco’s net sales for the first half ended September 2005 increased by 24.3 per cent to $37.4 million from $ 30.1 million in the corresponding period of last year. The company incurred a net loss of $3.20 million as against a net profit of $2.59 million. The R&D cost went up by 33.7 per cent to $13.9 million from $10.4 million.