Pharma major Dr Reddy’s Laboratories consolidated net profit decreased 56.6 per cent at ₹66.6 crore in the first quarter ended June 30, 2017, compared with ₹153.5 crore in the corresponding quarter of the previous financial year as per the Indian Accounting Standards (Ind AS).

The total revenue, however, increased 1.7 per cent at ₹3,371 crore against ₹3,312 crore in the year-ago period.

As per the International Financial Reporting Standards (IFRS), the company’s 53 per cent decrease in net profit at ₹59.1 crore (₹126 crore) on a revenue increase of 3 per cent at ₹3,316 crore (₹3,234 crore).

Addressing a press conference here on Thursday, its President & Chief Financial Officer Saumen Chakraborty said the results were “disappointing’’ on account of the slow realisation from new launches in North America, price erosion in the US due to customer consolidation and adverse impact of Goods and Services Tax (GST) in the domestic market.

While revenues from global generics grew 3 per cent, revenues from North America declined 4 per cent at ₹1,494 crore. In the domestic market, there was 10 per cent decline in sales at ₹4,687 crore (₹5,223 crore).

“From mid-May, all trades wanted to maintain less stock even though we have offered discounts which led to 50 per cent dip in June sales compared to about ₹180 crore sales in June last year,’’ he said.

Going forward, Dr Reddy’s will focus working together with the US Food and Drug Administration (USFDA) on the issues of audit. “Recent audits have gone well but we need to work on the matter,’’ Chakraborty said.

The focus on R&D, capex and new launches will continue. Dr Reddy’s is expecting to spend about ₹500 crore on capex on each quarter of the current financial year. It plans to launch about 15 new products this year.

Pact with biopharma firm Dr Reddy’s and CHD Bioscience Inc., a privately-held biopharmaceutical company, have entered into a global licensing agreement for the clinical development and commercialisation of a Dr Reddy’s phase-III clinical trial drug.

The drug candidate, DFA-02, is intended to be used for the prevention of surgical site infections, following non-emergency, elective colorectal surgery.

“Phase-II studies for DFA-02 have been successfully completed, and the product will be transitioning to pivotal phase- III registration studies,’’ the company said in a release.

Under the terms of the agreement, Dr Reddy’s will receive equity in CHD valued at $30 million upon an IPO of CHD or a minimum of $30 million in cash within 18 months of execution of the agreement.

It will also receive additional milestone payments of $40 million upon the USFDA approval. In addition, CHD will pay Dr Reddy’s double-digit royalties on sales and commercial milestones, the release added.

Dr Reddy’s scrip lost 3.29 per cent on the BSE on Thursday to close at ₹2,621.

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