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Orchid Pharma hopes investments will pay off by year-end

Our Bureau

CHENNAI, Dec. 27

AFTER a few years of large investment in the backdrop of declining profit, Orchid Chemicals & Pharmaceuticals Ltd expects the pay-off for the investment to come by the end of the current financial year.

Inspectors from the US Food and Drug Administration (USFDA) inspected Orchid's facility near Chennai in early November. A formal approval from the FDA is expected shortly, and the results should be evident in the next couple of months said Dr C.B. Rao, Deputy Managing Director, Orchid Chemicals.

The company is in the process of putting up infrastructure to export drugs to the US and Western Europe, markets that are more lucrative and stable than its traditional base of China and East Asia. Growing competition in its traditional markets has led to decline in Orchid's profit over the last two years.

Once the FDA approval comes through, Orchid is expected to begin shipping Cephalexin (antibiotic) bulk drugs to its associate in the US. Dr Rao said that the company is currently preparing to meet USFDA norms for another product too.

Along with the attempt to penetrate the US market, Orchid ventured into the domestic formulations (drugs in finished form such as tablets) a few years ago. Recently, in trying to expand its presence in formulations, Orchid bought Chennai-based Mano Pharma for Rs 26 crore.

Dr Rao said the buy-out was an attempt to strengthen Orchid's presence in the therapeutic segments of cardiovascular drugs, anti-diabetes drugs and neuro-psychiatry drugs - Orchid's strength lies in anti-infective drugs.

"Lifestyle" related segments such as cardiovascular drugs depended on awareness led growth, felt Dr Rao. He added that Mano Pharma had displayed marketing savvy, and this could be supplemented by Orchid's strength in technology.

Dr Rao indicated that Orchid is unlikely to acquire any other company in the near future, and Mano Pharma would function as stand-alone division in Orchid.

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