India's Cipla posts another profit decline, names insider Dinesh Jain CFO

India’s Cipla posted a bigger-than-expected fall in first-quarter profit on Thursday, logging its third straight quarterly decline as muted sales of a generic cancer drug and U.S. supply disruptions related to tumor treatment lanreotide weighed on results.

The drugmaker also appointed company veteran Dinesh Jain as its global finance chief, effective Friday. Currently head of corporate finance, Jain has been with Cipla for more than three decades and will succeed Ashish Adukia, who will move to another internal business leadership role.

Cipla has leaned more on its India business to offset weakness in the United States, where sales of the generic version of Bristol Myers Squibb’s Revlimid have fallen after losing exclusivity.

Its U.S. business was also hit after a U.S. Food and Drug Administration inspection at the facility of its sole lanreotide supplier led to a temporary halt in production.

India and North America together account for about two-thirds of the company’s revenue.

Cipla’s consolidated net profit fell 39.2% to 7.89 billion rupees ($81.73 million) in the quarter ended June 30, missing analysts’ average estimate of 8.17 billion rupees, according to data compiled by LSEG.

Revenue from operations rose 2.3% to 71.19 billion rupees, beating estimates of 70.73 billion rupees.

Sales in India grew by a double-digit percentage in respiratory, anti-diabetes and cardiac chronic therapies, the company said.

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It is also expanding in obesity treatments, including Yurpeak sold under a licensing agreement with Eli Lilly.

Revenue from its North America business fell 21% to 15.32 billion rupees, while India revenue grew 12% to a record 34.52 billion rupees.

Adding to concerns over its largest market, U.S. President Donald Trump on Tuesday outlined a phased tariff plan for imported generic medicines, giving drugmakers a two-year window before duties take effect.

CEO Achin Gupta said on Thursday the company would monitor the evolving situation on how to manufacture more in the United States.

“We have experience in doing that. So whichever way it (situation) moves, we will be able to adapt,” he said on a post-earnings call, adding that 35-40% of the company’s manufacturing was within the U.S.

Cipla’s respiratory franchise will be its biggest growth driver in the U.S. in the near term as the company expects a second product to be approved shortly, said Nirmal Bang analyst Niharika Agarwal.

Limited competition also provides the company more room to protect margins for its generic Ventolin and the yet-to-be approved Flovent inhalers.