Still subject to speculation the company is a target in a domestic criminal investigation over the pricing of generic drugs, Taro Pharmaceutical (TARO) reported an increase of $16.7 million in net sales fueled, ironically, on its U.S. generic business.
In a statement Nov. 8, the company said its gross profit was up 5.1% to $177.3 million in the third quarter, while its R&D expenses dropped $3.9 million and expenses tied to sales, marketing and administration fell $3.2 million.
The company also noted that its stash of cash was down $319.2 million to $909.5 million mainly due to the company's stock repurchase program with a $240.6 million impact and $251.3 million going into long-term bank deposits.
The share repurchase program included 1.8 million shares purchased from March 17 to August 18 with an average price of $138.80.
CEO Kal Sundaram said in a statement, "We are pleased with our sales and operating performance in the face of increasing competitive intensity and pricing pressure. Our new product sales have met, and in some cases exceeded our expectations, helping to off-set the decline in sales arising from the price erosion of existing products."
While the company maintains a research and development program, it also had a robust off-patent and generic drug business along with drug distribution in the U.S., Israel, Canada as well as other international markets. It is also manufacturers its own products.
The company currently has 36 Abbreviated New Drug Applications before the U.S. Food and Drug Administration and recently received an ANDA for Nafitfine Hydrochloride Cream USP 1% recently.
The company that was founded in Israel is still searching for a replacement for CEO Kal Sundaram who is scheduled to leave the executive offices by the end of the year.
Taro revealed earlier this year that it is cooperating with a Department of Justice probe into alleged price collusion in generic drugs. Taro is among a number of generic drug companies that have received subpoenas from the DOJ over the pricing of drugs and communications with other drug companies.
The Government Accountability Office issued a report in last month pointing out that it reviewed the pricing of more than 1,400 established generic drugs and that more than 300 of those had experienced at least one extraordinary price increase of 100% or more from 2010 to last year.
Taro may have other legal concerns because media reports say that a group of state attorneys are also looking at generic drug companies to determine if there have been any active efforts to fix prices on products.