Vol. 3, No. 6 June, 1999
NumberSubject
030601Ranbaxy in Change Mode
030602OPPI Demands Decontrol of Off-patent Drugs
030603SPIC May Spin-off Pharmaceutical Business
030604Pharmacia & Upjoh to Launch More Brands
030605Dr Reddy's Sets Up Drug Discovery Research Lab in the US
030606NPPA Announces Price Revisions
030607Glenmark to Set Up Drug Discovery Centre
030608No Takers Yet for Astra Stake in Astra-IDL
030609Piramal Net Up 19 Per Cent
030610Top Eleven Pharmaceutical Companies Do Well in 1998-99







































030601 Ranbaxy in Change Mode

Dr. Parvinder Singh, chairman and managing director of Ranbaxy Laboratories expired soon after he stepped down as managing director in favour of Mr. D S Brar. The new managing director is the first non-family chief executive of the company.

Meanwhile, Ranbaxy adopted a corporate governance code and set up three committees to promote transparency and good corporate governance. The majority of members of these committees which constitute committees on science, management, audit and finance will be non-executive directors. The code prescribes that non-executive directors can serve for a maximum of two terms of three years each.

Ranbaxy also approved a final dividend of Rs 2.75 per share, taking total dividend to Rs 5 per share on the enhanced share capital, for the nine months period ended December 31, 1998. The dividend for the previous year was Rs 10 per share. An interim dividend of Rs 2.25 pr share had been paid in March 1999.

The company plans to boost its international operations by entering the Brazilian, Chinese and UK markets. The company has incorporated a wholly owned subsidiary in Brazil and has decided to enter into a joint venture with a local company. In the United Kingdoms, Ranbaxy aims to make an entry into the branded business. The company is active in the generic business in the UK. Ranbaxy (UK) has notched sales of $ 12.1 million for the year ended December 31, 1998, a growth of over 67 per cent. In China, Ranbaxy's subsidiary Ranbaxy (Guangzhou China) Ltd., has register a 12.4 per cent increase in sales to $ 11.5 million in 1998.

The company is carrying out pre-clinical trials on a compound in the respiratory segment and plans to go in for an investigative new drug application (IND) by AD 2000. This will be the second new molecule to come out from Ranbaxy after its benign prostatic hypertrophy (BPH) product, Parvosin which has enter phase one of clinical trials. Parvosin, named after chairman Parvinder Singh, may be licensed out to a multinational after completing phase one trials. The world market for BPH is estimated to grow to $ 3 billion by 2003. The company is also working on another lead molecule in the BPH area. The phase one clinical trials will test the safety profile and tolerability of the chemical entity in normal human volunteers at various dosage levels. The phase two trials will test the drug's effectiveness at the final level.

030602 OPPI Demands Decontrol of Off-patent Drugs

The Organisation of Pharmaceutical Producers of India (OPPI) has demanded the decontrol of drugs that have gone off-patent internationally; in addition to drugs that are freely importable under OGL, that are exported in significant quantities and, that have been developed through indigenous research activities.

The organisation has also demanded that New Drug Delivery Systems (NDDS), vitamins, all medicines that are granted OTC status, veterinary products and external application should be considered for immediate price decontrol.

The organisation has also recommended the substitution of the price control system by a price management system, where the role of the government shifts from actual price determination to price management. In this system the government will continuously monitor the price change and the industry will provide periodic returns of all price changes.

030603 SPIC May Spin-off Pharmaceutical Business

Reportedly, SPIC, the 2,456 crore agri-business company is undertaking a restructuring programme to merge some of its associates and divisions to consolidate its operations. Its pharmaceutical division which produced a record 1184 MMU of penicillin-G last year may be spun off into a different entity.

030604 Pharmacia & Upjoh to Launch More Brands

Pharmacia & Upjohn which launched "Xalatan" brand of sterile ophthalmic solution intends to launch three major brands as soon as it receives an okay from the government. The company's ten branded products in the market currently are in oncology, female health care, metabolic, infectious, cardiovascular, critical care and some general product segments. Xalatan is the world's top selling glaucoma medication, which was introduced in India within one year of its launch in the US. The company's $ 8.8 million intraocular lenses plant near Bangalore with an installed capacity of 500,000 lenses per year now manufactures 1,000 lenses per week. The production of this plant is expected to be doubled shortly.

030605 Dr Reddy's Sets Up Drug Discovery Research Lab in the US

In a new development Dr Reddy's Laboratories is setting up a "satellite" drug discovery research laboratory in the United States. The laboratory, envisaged to be launched by January 1, 2000 will form a vital link in the company's goal to become a drug discovery pharmaceutical company, selling its own original molecules globally.

030606 NPPA Announces Price Revisions

The National Pharmaceutical Pricing Authority (NPPA) announced increase in prices of 14 formulation packs in the range of 3.5 per cent to 9.6 per cent and reduced prices of 26 packs by upto 51 per cent. The formulations for which prices have been revised include a range of anti-asthma Deriphyllin dosage formulations sold by German Remedies. Six Deriphyllin formulations prices were increased by 4.4 per cent to 9.6 per cent.

Wyeth Lederle's Ledermycin broad spectrum antibiotic formulations have been allowed to increase prices by 5.25 per cent to 8.3 per cent. The company's Lederplex vitamin B complex liquid has been allowed a price increase of 8.1 per cent. The prices have been fixed in accordance with the provisions of the Drugs Prices Control Order (DPCO).

030607 Glenmark to Set Up Drug Discovery Centre

Glenmark Pharmaceuticals is investing over Rs 30 crore to set up a drug discovery centre to carry out basic research in strategic therapeutic areas. The centre will be set up in a two-acre plot in the Thane-Belapur belt. The company which notched up sales of Rs 107 crore for 1998-1999, will conduct research on niche therapeutic areas like skin diseases, allergy and respiratory diseases. The company is looking for venture capital funds and equity participation from Japanese companies. It is also considering other avenues to raise funds like private equity and initial public offering.

030608 No Takers Yet for Astra Stake in Astra-IDL

After the merger of Astra with Zeneca, Astra's joint venture with the Hindujas in Astra-IDL is facing an uncertain future. The new company AstraZeneca do not want to continue in the partnership and the Hindujas are in search of a new partner for AstraZeneca's 27.5 per cent stake in the company. AstraZeneca is asking for a price of Rs 400 per share, a price most potential buyers find on the higher side. Astra-IDL can market Astra brands only for the next three years according to the agreement between the promoters of the joint venture. Astra brands contribute 65 per cent to Astra-IDL's revenues.

Astra-IDL recorded a 9.75 per cent decline in net profit to Rs 10.18 crore for the year ended March 31, 1999. Net sales rose by 2.2 per cent to Rs 101.34 crore. The Hindujas hold 27.5 per cent of the equity of the company.

030609 Piramal Net Up 19 Per Cent

Nicholas Piramal has recorded a rise of 19 per cent in net profit to 45.4 crore for the year ended March 31, 1999. The board has recommended a dividend of 55 per cent. Sales stood at Rs 441.8 crore which was higher by 14 per cent than that of the previous year. The company had spun off flaconnage and bulk drug divisions into separate subsidiaries in the beginning of 1998-99. The company's future product lauches include: Hoffmann La Roche's diet pill Xenical, Xeloda for breast cancer and Cymevene for transplants. The consolidated profit from Nicholas Piramal and spun-off divisions is Rs 65.7 crore and sales is Rs 717.7 crore.

030610 Top Eleven Pharmaceutical Companies Do Well in 1998-99

Despite the recession, earnings of the eleven leading pharmaceutical companies grew by 23 per cent for the financial year ended 1998-99 and their performance for the coming financial year depends on domestic sales and the government's pharmaceutical pricing policy. Rhone-Poulenc and Novartis showed good earnings. Rhone-Poulenc's earning were boosted by depreciation write-backs following a change in the method of calculation. The Novartis earnings was helped by a low employee-severance provision. Earnings of companies that depended on the Russian market declined because of that country's problems. Hoechst Marion Roussel is one such. Dr Reddy's also was affected because of the Russian market. Glaxo India and SmithKline Beecham Pharma, were affected by price cuts in some of their main products. Performance is expected to pick up in April-September due to the monsoon season.