Torrent Pharma turns sales focus to Brazil, Germany

Share of US business falls from 40% in FY16 to 21% in FY17

Torrent Pharmaceuticals, on seeing its US business slacken, is giving more attention to Brazil and Germany. Ahmedabad-based Torrent's US business dipped 49.6 per cent during 2016-17. Its share in overall revenue fell from 40 per cent last year to 21 per cent in FY17. Its Brazil business, on the other hand, after falling 17 per cent in FY16, grew 38 per cent in FY17. The German business showed 25 per cent growth in revenue. SOHINI DAS writes

Torrent Pharmaceuticals, on seeing its US business slacken, is giving more attention to Brazil and Germany.

Ahmedabad-based Torrent’s US business dipped 49.6 per cent during 2016-17. Its share in overall revenue fell from 40 per cent last year to 21 per cent in FY17.

Its Brazil business, on the other hand, after falling 17 per cent in FY16, grew 38 per cent in FY17. The German business showed 25 per cent growth in revenue.

For Torrent, the US has seen slowing sales of its Abilify generic, an anti-psychotic drug. With Alembic, Hetero Labs and Teva Pharma, it had got permission from the US Food and Drug Administration to market Abilify (aripriprazole) in multiple strengths and dosage forms around April 2015.

The company’s US sales had a significant boost after the launch of this limited competition product.

However, in 2016-17, its US revenue fell 51 per cent in the December quarter. For the full year, Torrent’s profit after tax was down 46 per cent to ~934 crore; its operating earnings were down 46 per cent to ~1,596 crore. Revenue for FY17 was ~5,857 crore, down 12 per cent.

Hence the enhanced focus on markets such as Brazil and Germany. A company official said while the overall Brazilian market had grown by 14 per cent, Torrent grew there by 22 per cent.

“We took up some restructuring operations and got approvals for two products there,” he said. Torrent launched Olmecor (Olmesartan), a hypertension drug, in Brazil last September. And, an anti-depressant drug, Loredon, this February. It would launch six drugs in the country by 2020.

Torrent also did well in both countries in the March quarter. The Brazilian business clocked an 81 per cent year-on-year growth; the German business grew 43 per cent.

A company official said, “One cannot give up on a market like the US but, yes, we have increased the focus on other international markets.” The plan is eight to nine product launches in the coming months.

The share of other international markets in Torrent’s revenue is 10-12 per cent at the moment.

A spokesperson declined to give an estimate on how much this could grow by 2020. Analysts, however, feel that even by conservative estimates, the share of international markets apart from the US would touch 20 per cent of Torrent’s revenue by 2020.

They believe the US market would face a lot of pricing pressure and be highly competitive in FY18. Consolidation of channel partners is believed to be one reason.

“The Brazilian market has stabilised in terms of currency fluctuations, and Germany is doing well among other European markets. Torrent’s focus is, thus, logical,” said a Mumbai-based analyst.

Meanwhile, domestic formulations showed eight per cent growth over a year in FY17. And, the recent acquisition of women health care brands from Novartis is likely to plug its therapy gaps in the India market.

A spokesperson said they expected to grow faster than the market rate in the domestic formulations segment.