Greater Costs Press Simcere Profit Down 61 Percent

NEW YORK (AP) — Chinese drugmaker Simcere Pharmaceutical Group said Tuesday its profit shrank 61 percent in the second quarter due to growing expenses, and weaker-than-expected sales of key products.

Simcere said it earned 37.2 million yuan ($5.4 million), or 9 cents per American Depositary Share, down from 95.2 million yuan ($13.9 million) a year ago. Revenue fell 3 percent, to 424.4 million yuan ($62.1 million) from 436.2 million yuan ($63.9 million).

According to Thomson Reuters, analysts were expecting a profit of 14 cents per American Depositary Share, and $69.3 million in revenue. In afternoon trading, the stock fell $1.03, or 12.9 percent, to $6.97.

Simcere's research and development costs rose about 4 percent, sales and marketing costs jumped 34 percent, and general and administrative expenses grew 7 percent.

Revenue from edaravone rose 24 percent to 183 million yuan ($26.8 million). The company said sales of its cancer drug Endu fell 49 percent, to 32.1 million yuan ($4.7 million), and generic drug sales were down 25 percent and fell short of expectations.

Edaravone is a neuroprotective stroke management medication.