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Piramal Health Q3 net plunges on higher R&D spend

Source : REUTERS
Last Updated: Thu, Feb 02, 2012 12:13 hrs
piramal

Drugmaker Piramal Healthcare Ltd's quarterly net profit plunged 86 percent as research and development (R&D) expenses zoomed, while income from investments declined.

Piramal Healthcare, which makes over-the-counter drugs and manufactures pharmaceutical products on contractual basis, said consolidated profit fell to 85.2 million rupees in October-December compared to 603.3 million rupees a year earlier.

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Sales rose 38.7 percent to 5.6 billion rupees.

Piramal Healthcare acquired the drug discovery business of group company Piramal Life Sciences in August last year. The acquired business has about 15 molecules in the clinical trials phase and need extensive financial support.

Post the acquisition, Piramal Healthcare's R&D spend rose over 8 times to 1.21 billion rupees in December quarter.

Piramal sold its Indian formulations business to U.S.-based Abbott Laboratories for $3.72 billion in 2010.

It used the cash from the sale to diversify into sectors like financial services and also make financial investments.

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The drugmaker also acquired a 5.5 percent stake in Vodafone's India mobile operations for $640 million in August last year.

Post the investment, the drugmaker's income from investments fell to 589 million rupees in the fiscal third quarter from 1.32 billion rupees in the previous year, it said.

Its financial services business generated an income of 178 million rupees in the quarter, it said.

Shares in Piramal Healthcare, valued at $1.45 billion, closed at 418.95 rupees on Thursday, up 0.35 percent at the BSE Sensex.


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