Caraco Loss Flat Despite Lower Sales

The Detroit generic drug maker Caraco Pharmaceutical Laboratories Ltd. (NYSE: CPD) reported a loss of $3 million or eight cents a share in the third fiscal quarter of its fiscal year, ended Dec. 31, an improvement from a loss of $3.3 million or eight cents a share in the same quarter a year earlier.

The smaller loss came despite a decline in revenue in the quarter to $40.4 million from $52 million a year earlier.

For the first nine months of the fiscal year, Caraco's loss was $3.3 million or eight cents a share, vs. a loss of $5.8 million or 15 cents a share a year earlier. Revenue for the nine months was $268.2 million, up from $178.4 million a year earlier.

Caraco filed two new drug applications relating to two products with the FDA during the first nine months of fiscal 2011. These products have been developed in partnership with other product development and manufacturing companies, including an affiliate of Caraco's parent, Sun Pharma. The total number of ANDAs pending approval by the FDA as of Dec. 31was 33 (including four tentative approvals) relating to 29 products. Out of the 33 ANDAs pending approval, 31 (including four tentative approvals) are out of Caraco's Michigan plants and the remaining two are from partners' plants.

Caraco says it has been working with manufacturing consultants toward the resumption of production at its Michigan plants, which were shut down by the FDA in 2009. The company says it will not be able to resume manufacturing before the end of its fiscal year March 31. As for when production will resume, Caraco said that "as always is the case in matters such as these, there is no assurance that the steps taken will be successful or result in resolution of the FDA compliance issues."

Sun has proposed to buy the stock it does not already own in Caraco for $4.75 a share.

Caraco develops, manufactures, markets and distributes generic pharmaceuticals to the nation's largest wholesalers, distributors, drugstore chains and managed care providers.

More at www.caraco.com