Taro Pharmaceuticals, a subsidiary of Sun Pharmaceutical and Industries Ltd, India, has received major set back during the year ended December 2010 and its net profit declined sharply by 56.8 per cent to $52.4 million from $121.3 million in the previous year. Its net sales improved by 9.4 per cent to $392.7 million. Operating income increased 20.2% to $80.9 million, or 20.6% of net sales, compared to $67.3 million, or 18.8% of net sales, in 2009.
Cash, including marketable securities, of $88.9 million, decreased $25.4 million from December 2009. Total debt decreased $104.3 million to $59.4 million at December 31, 2010, as the company focused on reducing its outstanding debt during the fourth quarter of 2010.
Dilip Shanghvi, Taro's chairman of the board commented, "Though progress is being made by Taro, we continue to focus on the challenges ahead of helping Taro improve its performance on a sustainable basis. Even while Taro has been spending over 9% of its net sales on R&D over the past three years, its R&D output has been below its potential. Hence, significant efforts are required in improving product selection and team productivity to build a good quality pipeline for Taro. As the Taro team executes its plans to meet these challenges, improvement in performance will be gradual."
The company said audited financial statements for the full-year 2009 will be reported in filings with the SEC as soon as they become available, and may differ from the information currently and previously reported by the company. Subject to the foregoing caveats, the 2009 information presented in this press release, updated from our April 30, 2010 press release, represents the best information currently available to Taro management.
The company cautions that the financial information presented herein does not constitute complete financial information, has not been reviewed by its independent auditors and is subject to change as the company continues to diligently work with its auditors to complete its 2009 audit in order to become current with its financial reporting obligations.
The company held its Annual General Meeting of Shareholders (the "Meeting") on December 30, 2010. At the Meeting, the five incumbent directors (Dilip Shanghvi, Sudhir Valia, Aalok Shanghvi, Hasmukh Shah and Ilan Leviteh) were re-elected to the company's board of directors to serve until the close of the next Annual General Meeting of Shareholders. Also, Ilana Avidov-Mor and Dan Biran were elected as statutory external directors, as defined in the Israeli Companies Law, for a three-year term.
Alkaloida Chemical Company Exclusive Group Ltd. (Alkaloida) Exercises its Rights to Purchase 1,450,000 Additional Ordinary Shares of Taro
On January 18, 2010, Alkaloida acquired 712,500 Ordinary Shares of Taro pursuant to a certain Warrant No. 2 dated August 1, 2007 issued by the company to Sun Pharma (the "Warrant"). Additionally, Alkaloida acquired 712,500 ordinary shares of the company available pursuant to a certain Share Purchase Agreement dated May 18, 2007 between Alkaloida and the company (the "SPA").
As a result of the exercise of the Warrant and the purchase of shares by Alkaloida pursuant to the SPA, the company's issued and outstanding ordinary shares are currently 44,505,457 and Sun Pharma owns, or controls, 29,497,933, or 66.3 per cent, of the company's ordinary shares, and with the Company's Founders' Shares, 77.3 per cent of the vote attributable to the share equity of the company.