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Informist, Thursday, May 15, 2025

By Narayana Krishna and Arya S. Biju

HYDERABAD/MUMBAI - Lupin Ltd. expects the share of complex generics in total US sales to reach 49% in the next five years from 31% in 2024–25 (Apr–Mar), led by new high-value drug launches and improved focus on specialty drugs, the company's management said in a post-earnings conference call.

Lupin reported a 114% on-year jump in Jan-Mar consolidated net profit to INR 7.73 billion, surpassing analysts' expectation of INR 7.43 billion. The profit for the quarter was driven by a sharp improvement in margin and lower tax outgo. The top line for the quarter rose over 14% year-on-year to INR 56.67 billion and slightly higher than the Street's expectation of INR 55.61 billion.

While expressing concern about the recent executive order and ongoing tariff threats by the US administration led by President Donald Trump, Lupin's management said it is confident of achieving healthy growth in the US in the next few years led by innovative products. The management said it has the flexibility to manufacture some drugs if needed to mitigate the impact of the proposed tariffs. Despite challenges, growth opportunities in the US will continue to drive the company in the coming years, the management said.

The US accounts for 38% of the consolidated sales of Lupin and the company has two manufacturing facilities in the US. The management said bilateral trade talks between India and the US may give some flexibility to the pharmaceutical industry in terms of tariffs, adding that the recent executive order on the Most-Favored-Nation policy may not impact Lupin's business.

The management expects significant contribution from the Mirabegron generic in the US in FY26 too. Mirabegron is used to treat urination issues. The drug had annual sales of over $2.4 billion in 2024, according to reports. Despite there being ongoing patent litigation with Astellas Pharma in US, Lupin will continue to sell the drug, the management said. Along with Lupin, Zydus Lifesciences Ltd. also sells the drug and is fighting the patent litigation. 

The company expects a revenue run rate of $250 million per quarter from US in FY26, the management said, though there may be some ups and downs quarter to quarter. For FY25, Lupin reported $925 million in revenue in the US, with a 13% on-year growth.

Lupin's management said it expects a paradigm shift across the US healthcare system due to new tariffs and subsequent policy changes and that there may be some strain on branded products but generic companies may not be impacted. The management said injectables and biosimilars would be the key growth drivers in the US in FY26 and beyond. The company has a pipeline of 30 new products each in these categories. Lupin is also working on several respiratory inhalation products and plans to launch at least three products in this category in FY27.

In India, which accounts 34% of its global sales, Lupin aims to grow ahead of the Indian Pharmaceutical Market growth in the coming years. In-licensing deals, partnerships and acquisitions are on agenda to drive the India growth going forward, the company said.

The company has large pipeline of products in respiratory, diabetic therapies along with some specialty products to drive growth. The management said the pharmaceutical Industry in India expected to grow 2.2 times in next five years. The company is planning to launch its first GLP-1 product Semaglutide tablet and injectable version with a partner in India.

Lupin expects a marginal increase in its research and development spend in FY26 to 8.5% of its total sales against 8.0% in FY25, the company's management said. As the government is encouraging more innovation and development within India, drug development is expected to pick up significantly in coming years, Lupin said. However, the company is focused on cost optimisation to improve its margins further. Lupin reported 34% on-year growth in Jan-Mar EBITDA to INR 13.78 billion.

The management said its arm Lupin Diagnostics is expected to EBITDA positive in FY26. It has over 950 diagnostics centres across the country. On Thursday, shares of the company closed almost flat at INR 2,072.90 on the National Stock Exchange. End

Edited by Ashish Shirke

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