Pfizer

The Indian Pharma Market (IPM) growth slowed to 5.7% in the quarter, primarily due to demonetization. Pfizer estimated a direct revenue hit of ₹15 crores in November alone. While chronic therapy drugs saw a temporary 'phase bump' as patients stocked up, acute therapies were significantly impacted. Management noted that while cities have recovered, interior parts of North and East India still lag in returning to normal run rates.

The quarter's results were heavily skewed by the discontinuation of the core Corex formulation and the divestment of brands to Piramal and Abbott. Corex revenue dropped to ₹58 crores from ₹77 crores YoY. Transition products, which contributed ~₹100 crores in FY16, are also phasing out. Management is now focusing on 'Continuing Business,' which stood at ₹433 crores for the quarter.

Approximately 15-16% of the continuing business is under price control, where price drops ranged from 15% to 50%. Despite this, Pfizer maintained a 60% gross margin by managing the product mix. However, the loss of high-margin Corex sales led to a 30% drop in profit from operations, as fixed costs like employee expenses (which rose to ₹87 crores) could not be immediately rationalized.

To offset losses, Pfizer is integrating Meronem, an anti-infective brand acquired globally from AstraZeneca, which has an annual India revenue of ~₹100 crores. Additionally, the company has soft-launched 'Corex T' (a Codeine-based prescription drug) and is leveraging the Corex brand heritage for new line extensions. Corex DX is already showing high double-digit growth with an annual run rate of ~₹50 crores.

Management faced tough questions regarding the 'huge pile of cash' on the balance sheet. While they remain 'open to opportunities,' no firm acquisition plans were shared. They emphasized that Pfizer Inc. sees India as a critical market, especially after the Hospira acquisition, which made India one of Pfizer's largest manufacturing bases globally. The long-term goal remains growing at or above the market rate.