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Matrix Labs firms up profit sharing pact with US firms

C.R. Sukumar

Hyderabad , Nov. 23

HAVING successfully completed the process of merging three companies with it, roping in of foreign equity investors for over 40 per cent equity and rewarding the shareholders with a 1:1 bonus issue recently, Matrix Laboratories Ltd (MLL) has recorded another wealth creation milestone by entering into profit sharing arrangements with the US-based pharmaceutical companies for finished dosages.

While sticking to its core philosophy and business model of complementing and not competing with the customers, Matrix has firmed up the agreements with US-based customers, wherein Matrix would develop and manufacture the active pharmaceutical ingredients (API) and finished dosages (FI) while the US partners would take the responsibility of regulatory filings and marketing.

When contacted, the MLL Chairman and Chief Executive Officer, Mr N. Prasad, confirmed the development and told Business Line that the company has entered into arrangements for 20 products so far. "This is fully in line with our business philosophy of not competing with our customers. Contract manufacturing of formulations will be a complementary business and gives us an opportunity to serve our customers better, besides improving our value chain by adding value to our APIs business," he said.

Accordingly, the company has decided to set up a USFDA compliant Greenfield Formulation facility at a capital outlay of Rs 75 crore for contract manufacturing to pharmaceutical industry in regulated markets. The new finished dosages facility with a capacity of 2 billion tablets on a two-shift basis per annum would be commissioned by the fourth quarter of next fiscal.

As a part of the strategy that helps it derisk the product concentration and also helps expand the product portfolio, the company is currently in the process of identifying around 40 more products to take its total portfolio to 150 products in the next year-and-a-half, covering almost all the therapeutic segments. According to Mr Prasad, the company currently has a product basket of 112, of which 39 were commercialised and sold, 16 validation quantity was supplied, 11 under validation, 10 development completed and 36 under development.

"At present, we have presence in all the therapeutic segments except oncology, diabetics and cephalosporins. While we have decided not to enter the over-crowded cephalosporins segment, we are now actively looking at opportunities in oncology and diabetics. Of the total of 112 products at present, 28 are in CNS (central nervous system) segment, 19 in anti-retrovirals (ARVs), 13 in cardiovascular (CV), 11 in pain management, 9 in anti-bacterial, 8 in gastroenterology (GI), 6 in anti-asthma, 5 in anti-fungal, 5 in lipid lowering and 8 in other segments," Mr Prasad said.

As at the end of September 2004, the company has filed a total of 27 Drug Master Files (DMFs) with US FDA. "We hope to have over 40 US DMFs on hand by the end of the current fiscal, reflecting our wide basket of products for the US and other regulated markets. We have also filed a total of 34 invention patents, process as well as polymorph, for 21 products as at the end of September, which again reflects our IPR-focus," Mr Prasad said.

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