The Hindu Business Line : Matrix Labs Q2 profit slips

Matrix Laboratories Ltd, the Hyderabad-based pharma company recently acquired by Mylan Labs, has suffered a fall of 63.61 per cent in consolidated net profit during the second quarter of the current financial year ended September 2006, despite a growth of 27.98 per cent in sales.

As per the unaudited consolidated financial results approved by the board here on Tuesday, the company reported a sales turnover of Rs 373.2 crore as against Rs 291.6 crore in the corresponding quarter last year, but suffered a fall in net profit at Rs 15.9 crore (Rs 43.7 crore).

In a press release here, the company said the consolidated net profit was after charging off the entire R&D spend of active pharmaceutical ingredients, finished dosages and drug discovery. It incurred an R&D expenditure of Rs 22.62 crore during the quarter under review (Rs 8.9 crore).

The company said amortisation of Rs 1.48 crore was considered in Mchem, China, against intangibles during the quarter. Further, Matrix said that the consolidated financial results of the quarter under review were not truly comparable with those of the previous year's corresponding quarter due to various acquisitions completed subsequently.

The generic API business contributed Rs 100.5 crore to the consolidated net sales during the quarter (Rs 127 crore). The company attributed the shortfall to less-than-anticipated off-take of certain key products in Matrix India such as modafinil and simvastatin, and delay in the launch of amlodipine besylate in Canada.

The consolidated sales of anti-retrovirals stood at Rs 95.4 crore (Rs 103 crore). This fall was due to the delay in finalisation of tenders in certain key markets, which the company expects to materialise in the subsequent quarters.

The company's subsidiary - Docpharma NV, reported a growth of 11 per cent in revenue at 24.4-million (21.95 million) but suffered a fall in net profit at 1.1 million. The fall was attributed to under-performance by the hospital business of the subsidiary.

Aggressive R&D

During the quarter, Matrix filed four DMFs in the US, taking the total tally to 68. It has filed two ANDAs with the USFDA, taking the total to three. Matrix has filed six patents, taking the tally up to 62. Further, the company said it is currently working on a large portfolio of finished dosage forms across therapeutic segments for the US and European markets, and is set to make a total of 30 submissions of finished dosages before the current financial year-end.