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Strides Arcolab acquires sterile formulations facility in TN for Rs.125 cr, EBDITA up by 37% in Q1

Our Bureau, MumbaiThursday, April 26, 2012, 15:15 Hrs  [IST]

Strides Arcolab's wholly owned subsidiary, Agila Specialities, has acquired a US FDA approved sterile formulations facility situated at Hosur in Tamil Nadu from Star Drugs and Research Labs Ltd for a total consideration of Rs.125 crore. The facility manufactures a wide range of injectable formats. The liquid vials unit with a capacity of 97 million units has recently been approved by the US FDA. The facility is in close proximity to the Strides new Sterile complex, in the outskirts of Bangalore. The acquisition will provide immediate incremental capacity as the existing capacities are fully committed due to drug shortages of sterile injectables worldwide.

Arun Kumar, vice president and Group CEO, said, “This timely acquisition brings into our fold, an asset which is of immediate importance given the demand for sterile injectables worldwide.”

Strides Arcolab, a Rs.2,500 crore plus pharma major, has posted better growth of 36.8 per cent in consolidated earnings before depreciation, interest, tax and adjustments (EBDITA), during the first quarter ended March 2012. Its EBDITA reached at Rs.138.87 crore from Rs.101.50 crore in the corresponding period of last year. Its net profit after tax and adjustments amounted to Rs.642.19 crore as against Rs.45.08 crore, due to profit on sale of investment of Rs.631.65 crore as against nil in the last period.

Its consolidated net sales increased by 8.2 per cent to Rs.527.47 crore from Rs.487.47 crore. The Agila Specialties commercialized 9 products in US during first quarter ended December 2012. The operationall revenue of Agila Specialties increased by 103 per cent to Rs.274 crore with EBDITA margin of 26 per cent. Agila will continue to focus on expanding regulatory filings in established markets like Canada, Australia and Europe, while Pharma would focus on niche US product filings. Agila filed 5 ANDAs during first quarter and its cumulative ANDA filings reached at 152. It received 9 ANDA approvals during first quarter and cumulative ANDA approval worked out to 70 including 4 tentative approvals. The cumulative ANDA filed by its Pharma division reached at 39.

The Pharma division's operational revenues excluding divested operations grew by 48 per cent to Rs.157 crore with EBDITA margin at 19 per cent. The division delivered a strong performance, displaying higher EBDITA margins post divestment of low margin Ascent Australasia operations.

While commenting on performance, Arun Kumar, said, “The quarter's strong operational performance in both specialties and pharma businesses reflect the company's strongly articulated niche IP led strategy. Agila's performance is driven by significant operating leverage and ramp up in capacity utilization with continued regulatory approval momentum.”

Though the consolidated operations improved during the first quarter ended December 2012, Strides incurred a standalone net loss of Rs.28.15 crore due to foreign exchange loss as against a net profit of Rs.12.74 crore in the similar period of last year. Its standalone net sales also declined by 2.5 per cent to Rs.124.01 crore from Rs.127.20 crore.

 
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