Financial Daily from THE HINDU group of publications
Tuesday, Mar 29, 2005
Strides bets on new R&D centre for growth
Bangalore , March 28
STRIDES Technology & Research Centre (STAR), the new Rs 18-crore R&D facility of Strides Arcolab Ltd, will be a new engine of growth and focus on research on malaria, tuberculosis and HIV besides research activities of Strides' global partners, company brass have said.
The new global-scale facility spread over 50,000 sq ft at its existing location in south Bangalore will be operational in a few weeks. STAR has recruited 160 research staff and plans to take this size to 300 by next year. "The new R&D centre will herald a new chapter in the history of the company. It will provide significant impetus to our research strategy which is focussed on novel drug delivery systems, non-fringing processes and proprietary matrix technology," Mr Arun Kumar, Group CEO, said at the inauguration of the centre on Saturday.
The Exim Bank CMD, Mr T.C. Venkat Subramaniam, inaugurated the centre.
In due course, STAR 2 was also on the anvil and would be engaged in active pharmaceutical ingredients and chemistry synthesis phase related to oncology and growth hormone therapies, according to Mr K.R. Ravishankar, CEO-India.
The generic and nutraceutical exporter's current focus, he said, was on the regulated markets, from where it expected to get a bulk of its growth. Alongside filing ANDAs (abbreviated new drug application) and DMFs (drug master file) in the US, Strides was also expanding its capacities so as to be ready for production when the US approvals were expected to come in a year or two. Through a 50:50 joint venture with US company Akorn, it plans to launch 20 generic drugs in the hospital segment in the next couple of years.
It will set up a new manufacturing plant for injectibles later this year with an investment of Rs 100 crore. Its other facilities for penicillin, betalactum and cephalosporin injectibles were going in for US FDA inspection in April, Mr Arun Kumar said.
The expansion plans are to be funded by a proposed issue of FCCBs or similar securities for around Rs 175 crore.
Strides has entered into supply agreements with at least 10 pharma companies across the globe, including hospital majors in the US, Italy and Japan.
Strides to pay 15 pc
THE Strides Arcolab board has recommended 15 per cent dividend for the 15-month period ended December 2004.
On consolidated and full-year basis, the company posted revenues of Rs 462.45 crore which translates into 29.7 per cent growth during 2004. The net profit has soared to Rs 43.99 crore compared to a net loss of Rs 27.9 crore during the same period of 2003. It accrued profit of Rs 12.4 crore after restructuring the shareholding in Indian and Latin Amercian subsidiaries.
Indian operations grew 33.6 per cent to Rs 306.16 crore for the full year. The net profit was Rs 29.15 crore compared with Rs 6.3 crore last year. With revenues flowing from Japan and Australia plans and the focus on regulated markets, the operating margin was 25.3 per cent, up from 18.4 per cent.
For the full year, sales from regulated markets contributed 25 per cent of the total income. Latam activities alone generated $44 million while the US subsidiary filed the first ANDA in February.
Exim Bank could get to part-fund acquisition of pharma cos abroad
THE post-patent pharmaceutical scene is getting interesting for Exim Bank too: With quite a few domestic pharma companies - at least four actively at present - pursuing acquisitions abroad, Exim Bank could also get to part-fund the acquisition or even pick up to 25 per cent of the stake, according to Exim Bank Chairman and Managing Director, Mr T. C. Venkat Subramaniam.
Speaking to newspersons after inaugurating Strides Arcolab's R&D centre on Saturday, Mr Venkat Subramaniam said that Exim Bank was interested in funding new initiatives in pharmaceuticals too, such as the one it created with CFTRI's food technology.
Exim Bank, for example, financed Hikal's Dutch acquisition. The outcome of other companies' such new pursuits, he said, may become visible in the coming months.
Pharma companies' loan component with Exim Bank was currently 9 per cent or around Rs 1,200 crore.
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