Pharmabiz
 

Matrix Labs sets a turnover target of Rs.1000 crore by 2006

Our Bureau, HyderabadWednesday, January 7, 2004, 08:00 Hrs  [IST]

Matrix Laboratories has entered into a tie up with H Fischer & Co International GmbH and CES Beteilinguys GmbH, both part of a $300 million German pharma player, to form a joint venture company 'Medikon Galenicals Pvt. Ltd.' for operations in India. The three companies have also established 'CEM Pharma Life Sciences Ltd.' to cover operations in Ireland. Matrix and the German partners hold equal stake in both the ventures. Medikon, a Dossier manufacturing company, will also develop finished dosages. It will undertake stability tests, bio-equivalence studies, and offer Dossiers to generic companies in Europe. A pilot plant will be set up near Hyderabad, and the company expects to begin work on the project in the next two months. The facility would have an investment of Rs.20 crore, with equal contribution from Matrix and the German partner. "It will allow Matrix to have sustainable business in terms of APIs," said C Ramakrishna, executive vice president, Corporate Finance & Corporate Services. The Ireland venture, CEM Pharma will focus on regulated markets and will also take up some of the work carried out in India. Matrix has commercialized 43 APIs, and another 37 are in various stages of development. The company has seven manufacturing facilities, out of which major facilities are located at Pashamylaram, Jeedimetla and Kazipalli industrial areas, near Hyderabad. The company has filed 10 DMFs in USA, 10 more are expected in the near future, and plans to introduce 25 drugs in the US in the next three years. Anti-virals, anti-fungals, anti-AIDS drugs, CNS agents are the key therapeutic drugs that will be manufactured. In the first six months of the current financial year, Citalopram contributed 32 per cent of sales, and anti-AIDS drugs accounted for 18 per cent of the total sales. Citalopram received a good response from Europe so far, and the company will serve US markets from next year. Anti-AIDS drugs were served at semi-regulated markets and in Africa. Contract manufacturing will account to $10 million in 2003-04, and is likely to grow by 30 per cent in the next three years. The company is to serve both innovator and generic companies. Asked about the advantage of the mergers that Matrix made with Medicorp and Vorin in the past, Ramakrishna said that through Medicorp, a quick entry in US markets became possible as it had very good relations with US based generic companies. And through Vorin, a strong bond with Ranbaxy was established. Matrix has 20 product supply agreements with Ranbaxy, and is Ranbaxy's key API supplier today. In the last week, Matrix was roped in US-based Newbridge Capital as a strategic investor and Temasek Holdings, Singapore as co-investor. It was decided to allot 22.50 lakh equity shares on a preferential basis to strategic investors, which will be followed by issuing of 18 lakh equity shares from the existing shareholders to the two investors at Rs.1500 per share through secondary sale. This would fetch the company Rs.607.50 crore. Both the investors are to get 11.25 lakh shares each on a preferential basis and nine lakh shares through secondary sale of shares. Post-allotment of shares, the promoters stake would come down from present 51 per cent to 37 per cent. The funds will be used for retiring long term debt, meeting working capital requirements such as taking up an anti-HIV programme, and part of the funds will be reserved to meet corporate requirements. Matrix is planning to invest Rs.25-30 crore to set up a corporate R&D centre at Hyderabad and hopes to complete it within a year. The company's turnover for the year 2002-03 was Rs.417 crore, and it is expecting 35 per cent growth during this FY. It has kept a turnover-target of Rs.1000 crore for the FY 2005-06. In the coming years, the company wants to continue its focus on generics business, contract manufacturing and contract research, apart from the anti-retroviral segment. Matrix is one of the leading Indian API manufacturers, with over 100 R&D scientists. It recently won a contract from the Clinton Foundation for the supply of ARVs to fight HIV/AIDS.

 
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