Aventis tightened control on its expenses that grew only 4.4 per cent to Rs 140 crore. Consequently operating profit grew by 36.5 per cent at Rs 35 crore. OPM jumped from 16 per cent to 20 per cent. Net profit grew by 37 per cent to Rs 23.3 crore.
Aventis has a relatively small presence in the Rs 20,000 crore Indian drug industry. But it has created most successful brands in most of the respective segments. Its top 10 brands account for more than 70 per cent of its turnover. Aventis launched new products earlier simultaneously with global launches to enhance the life cycle of these drugs. In a very short time, its Cardace brand has become number one cardiovascular brand. Clexane has also captured the largest market share in anti-thrombosis segment. In oral anti-diabetic segment, its two products Daonil and Amaryl are the leading products. Besides these, there are a number of brands which lead in their respective segments.
However, some of the old brands of the company are feeling the heat of competition. New entrants in vaccine segment against its most powerful brand Rabipur may give some tough time to the company. National Dairy Development Board has introduced AbhayRab and that is competing on price front in most of the institutional sales. Cadila has also joined in the vaccine segment and is likely to increase competition.
The insulin segment that contributes substantially to the companys total turnover is set to face tough competition from the new entrant Wockhardt, that launched a recombinant human insulin at a much lower price. However, Aventis has the backing of its parent companys product portfolio to blunt the edge of competition form new products. The company has recently launched the worlds first once-a-day basal insulin Lantus, the largest selling insulin, within two years of its launch in US and Germany. The new product is expensive as compared to recombinant human insulin of Wockhardt and Eli Lilly. Aventis will spend substantially on marketing and promotion of Lantus. However, this product may not contribute to the profitability during first year of its launch.
The Indian insulin market is price-sensitive as only 6 per cent of anti-diabetic patients can afford insulin treatment. India currently has the largest diabetic population in the world with 37 million people, and the numbers are estimated to grow to 57 million by 2025.
Aventis is likely to launch a new product Actonel for osteoporosis therapy. This product was developed jointly with Procter and Gamble and has been very successful in several countries in the world.
Aventis exports mainly to Russia and the CIS countries. It is the largest drug supplier in these countries. During the last few quarters, the company has faced problems owing to changes in regulatory norms in these countries. The company has almost completed re-registration in these countries and will resume export in the current fiscal.
Aventis 12 brands account for 38 per cent of domestic sales. The new DPCO guidelines are likely to affect its sales in a major way as many of its key profitable products are likely to fall under DPCO.
Aventis may step up new projects for clinical development as part of its global clinical development programme.