Micro Labs is gearing up for an Initial Public Offer to finance its expansion of production to achieve a faster entry into regulated market. The company is already working on the modalities of the public issue but it is yet to decide about the date.
As a part of its well-planned strategy and a focused approach to offer the global pharmaceutical majors its expertise in formulation research, Micro Labs has gone ahead to invest Rs. 50 crore to set-up two R&D facilities at Mumbai and Chandigarh. Both these Centres for Formulation R&D at an investment of Rs. 25 crore each would be ready within the next 15 months to specifically address the contract research assignments from international customers. Along with this, Micro is scouting for acquisitions in Europe. It has set up two units in South Africa with local partners for the production of formulations.
The global focus of contract research, acquisitions and units abroad would strengthen the company in terms of faster growth, higher profitability, increased revenues and business expansions.
For its two Centres for Formulation R&D, around 100 scientists would be hired. The company preferred Mumbai and Chandigarh because of access to quality and experienced scientific skills. Mumbai is already the hub of pharma enterprises and there is a ready availability of expertise. Chandigarh was opted because of the presence of National Institute of Pharmaceutical Education and Research (NIPER). Another reason was the accessibility to the company's formulation unit at Baddi in Himachal Pradesh where scientists would deal with pilot trials of products to the US market.
The Micro Labs Advanced Research Centre at Kudlu in the outskirt of Bangalore is a centralized and exclusive facility for in-house research set up at a cost of Rs. 35 crore.
Coming to its new US FDA plants, the two units are expected to be commissioned in early 2007 one is the Rs. 35 crore tablets and capsule facility at Baddi and the other is an API unit in Bommasandra, Bangalore with a capacity of 60 tonnes per annum. Production from this unit is for captive consumption.
Its formulation units at Bommasandra for injectables and cephalosporin are ready for US FDA inspections. In October 2006, Micro will commission its advanced ophthalmic facility being set up at Rs. 60 crore.
"It was crucial us to plan and develop strategies to enter regulated markets, which is vital under the prevailing domestic market conditions", Dilip Surana, managing director, Micro Labs told Pharmabiz.
"Out of the Rs. 688 crore turnover, exports account for 50 per cent. We intend to increase international presence with not just finished formulations but also capitalize opportunities in contract research-manufacture", stated Surana.