Financial Daily from THE HINDU group of publications
Saturday, Jul 13, 2002
Neuland Labs to cash in on USFDA approvals
HYDERABAD, July 12
NEULAND Laboratories Ltd (NLL), the city-based pharma player, has refined its short- and medium-term strategies to achieve significant growth both in top line and bottom line from the current fiscal year onwards.
Against the turnover of Rs 101.03 crore and a profit before tax (PBT) of Rs 4.36 crore during the last fiscal, NLL had set an internal target of achieving a top line growth of Rs 120 crore and a PBT of Rs 10 crore during the current fiscal.
According to the NLL Chairman and Managing Director, Dr D.R. Rao, the company plans to cash in on the United States Food and Drug Administration (USFDA) approvals already obtained for certain products and some in the pipeline so as to concentrate on the regulatory markets.
The approvals received from the international regulatory authorities so far include Certificate of Suitability for Ciprofloxacin Hydrochloride, Council of Europe certification for Ranitidine Hydrochloride form-I and Salbutamol Sulphate EP, USFDA certification for Albeturol Sulphate, Ciprofloxacin Hydrochloride, Latanoprost and Ranitidine Hydrochloride form-I and form-II.
The company also filed drug master files before the USFDA for products such as Enalapril Maleate, Ipratropium Bromide EP, Itraconazole, Mirtazapine, Ofloxacin and Sotalol HCL USP.
The USFDA authorities had inspected the company for Latonoprost, an innovative drug for glaucoma, for which Neuland is a contract manufacturer. According to Dr Rao, the company's plant at Pashamylaram stands approved by FDA for manufacture of non-sterile active pharmaceutical ingredients (APIs) produced by chemical synthesis, which he termed as a significant achievement. Stating that the global approvals for sizable product portfolios had helped the company market the products in the European countries last fiscal, he said the forward plans were to use these products as revenue drivers on the back of regulatory approvals.
Dr Rao said NLL proposed to dedicate its entire production capacity to quality-conscious customers and remain a preferred vendor to global pharma majors. Though the revenue earnings from contract manufacturing were marginal during last fiscal, the company found tremendous potential in future.
Keeping this in view, NLL had tied up with four leading generic companies in Europe. According to Dr Rao, deliveries to some of these new partners had commenced during the current fiscal. Neuland would outsource intermediates only for other global markets and would strictly follow the global standards for manufacture, packing and release of products for regulatory markets from the company's own facilities, he said.
The company is working closely with some of the large generic companies based in Europe and North America for the development and manufacture of APIs. With the expiry of the European patent for Ciprofloxacin Hydrochloride, the company expected to capture a substantial share in the generics market for this product in Europe, Dr Rao said.
Further, in view of the increased demand for its products approved by the global regulatory authorities, NLL started focussing on adding capacities. As a part of this move, the company invested Rs 2.85 crore to upgrade the facilities for the removal of certain bottlenecks at the Pashamylaram unit and upgraded the Bonthapally unit also.
Stating that better realisations and quicker operating cycles improved the working capital flow, Dr Rao said the company witnessed higher business volume during last fiscal while maintaining the same working capital. Having successfully retired some high cost loans and switched over to lower coupon borrowings during last fiscal, the company expected to further reduce the working capital tie-ups and reduce around Rs 7 crore of net liabilities during the current fiscal, he said.
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