Glenmark Pharma tanks 9% after disappointing Q3 earnings, US pricing pressure to continue

Glenmark Pharma shares fell more than 9 percent intraday Friday, hitting a 52-week low of Rs 524.20 on the BSE after the company posted steep decline in profits and expects the US pricing pressure to continue.

While addressing conference call, Glenn Saldanha, Chairman and MD said the US business continued to be very challenging and that pricing pressure would remain challenging for 5 quarters.

Net profit plunged 78 percent year-on-year to Rs 104.7 crore in the third quarter ended December – on lower US sales, despite growth in domestic formulations and other geographies. On sequentially too, the net profit fell 51 percent.

Revenues during the quarter declined 13.6 percent to Rs 2,203.7 crore compared to year-ago, but these sales (especially US business) are not comparable year-on-year as Glenmark was enjoying windfall gain from the 180-day marketing exclusivity for generic version of cholesterol lowering drug Zetia in US market.

Its US business degrew by 40.21 percent to Rs 735.89 crore while Rest of World (ROW) business grew by 28.29 percent, Europe formulations by 14.84 percent and India showed 12 percent rise in Q3 YoY.

“The overall performance was driven by India, Europe, ROW and API business. The India business rebounded and has shown good sales growth due to improvement in the overall demand environment,” Saldanha said.

Glenmark said API business rose by 20.62 percent.

At 10:00 hours IST, the stock price was quoting at Rs 530.35, down Rs 47.70, or 8.25 percent on the BSE.moneycontrol