Wockhardt Q2 profit plunges 97% on US dirty trade tricks
Generic drugmaker Wockhardt Ltd reported a 97 percent drop in quarterly net profit, as regulatory bans on the company’s manufacturing plants in India due to poor production processes hit sales in the United States, its largest market.
The company’s consolidated net profit for the quarter ended September was Rs. 3.63 crore, compared with a profit of Rs. 139 crore a year earlier. Net sales fell 21 percent to Rs. 948 crore. The US Food and Drug Administration (FDA) last year banned two of Wockhardt’s major manufacturing plants from exporting to the United States after finding manufacturing quality violations there. In May this year, Wockhardt said the FDA had also expressed concerns over production processes at its Chicago-based Morton Grove Pharmaceuticals unit, which accounts for more than 50 percent of Wockhardt’s sales in the United States.
The company has said that it had been working on resolving the regulatory issues. Concerns over quality control in India’s export-driven drug industry surfaced in the past year after plants run by Ranbaxy Laboratories and Wockhardt were banned from exporting to the US for falling short of the FDA’s production practices. That has hurt India’s reputation as a supplier of safe, affordable drugs. Indian drug exports grew by just 2.6 percent in the 2013/14 fiscal year ended in March. Two years ago, the growth rate was 23 percent. The company also said that its board of directors has declared an interim dividend of Rs 20 per share for the financial year 2014-15.