GlaxoSmithKline Pharmaceuticals (GSK), a debt free pharma multinational, has received major setback during the first quarter ended June 2017 and its net profit declined sharply by 63.4 per cent due to de-stocking and price reduction of several products. Its net sales declined also declined by 14.4 per cent to Rs.587 crore from Rs.685 crore. EPS declined to Rs.3.1 from Rs.13.3 in the last period.
While talking to shareholders at the 92nd annual general meeting, D S Parekh, chairman, GSK India said, “The June quarter was difficult one due to de-stocking and price reduction of several products. The new facility at Vemgal, Karnataka with the investment of Rs.1,000 crore will offer cost effective products from 2018. The new facility will initially supply a range of solid dose form products. The company is set to focus on untapped rural market, vaccines and new products. ”
A Vaidheesh, managing director, said, “Our company's revenue and profit before tax performance have been temporarily adversely impacted by the introduction of GST. The pharmaceutical trade channels de-stocked impacting the overall performance of the industry. In line with our expectation, our primary sales reduced by an approximate Rs.130 crore or equivalent to 2 weeks of sales that contributed to a declined of 20 per cent partly offset by an increase in value growth of 6 per cent. We expect the trade channels to normalise in future months.”
He added, “Our prescription uptake in the market remains strong where we maintained patient supply for the GST transition. The IMS TSA (Territorial Sales Analysis) data or the six month period to June 2017 highlights GSK's fundamentals in prescription fulfillment remain intact growing at 7 per cent in value terms ahead of a market growing at 6 per cent”
The company is planning to launch new products from its global respiratory and vaccines pipeline and reviewing these for a possible launch for its Indian patients. Around 30 per cent of global pharmaceutical volumes sold by GSK plc. is marketed in India. Its 15 brands are in top 300 ranking as per IPM.
The company has invested Rs.115 crore to construct a facility for the manufacture of Eltroxin, where the medicine is manufactured in a respiratory-free environment. The new Eltroxin facility will be fully operational in 2018. GSK is also planning to upgrade the dermatologicals and tablets facilities by investing in infrastructure.