Strides Arcolab, a Rs.1,200 crore pharma giant, has amalgamated Shasun Pharmaceuticals (Rs.1,300 crore plus entity) with effect from November 19, 2015 and Shasun Pharma share of Rs.2 each was suspended from trading on stock exchanges. Shasun share was closed at Rs.428.85 on BSE with a market capitalisation of Rs.2,884 crore on the last trading day. It reached its yearly highest level of Rs.432.05 on November 17, 2015. Strides share of Rs.10 each surged by Rs.20.50 to Rs.1,366 with market capitalisation of Rs.8,145 crore on BSE. Under the amalgamation scheme, Shasun shareholders will get 5 equity shares of Rs.10 each of Strides Arcolab for every 16 equity shares of Rs.2 each of Shasun Pharmaceuticals. With merger, Strides Arcolab has changed its name to Strides Shasun Ltd.
Strides is now planning to raise long term funds upto Rs.1,500 crore by way of issue of GDRs.ADRs/FCCBs/QIP or such other equity linked instrument including the green shoe option after certain approvals.
For the first half ended September 2015, Strides' consolidated net sales increased by 19.8 per cent to Rs.607 crore from Rs.506 crore in the same period of last year. Its net profit reached at Rs.60.84 crore as against a net loss of Rs.23.57 crore. EPS worked out to Rs.10.20 as against negative Rs.3.96 in the last period. With the acquisition of Arrow and expected FIPB approval for Shasun merger, the company expects its revenue in the range of Rs.1,850 crore to Rs.2,000 crore for second half of FY16 with expected EBDITA of Rs.350 crore to Rs.380 crore. The guidance does not include recently announced acquisitions of CNS divisions form Sun Pharma, brands portfolio from Johnson and majority stake in domestic branded business from Medispan.
Strides R&D expenditure went up to Rs.11.20 crore during the second half ended September 2015 from Rs.5.7 crore. Its cumulative ANDA filings reached at 34 ANDAs and 16 ANDAs are pending for approval from US FDA. It received one ANDA approval during the quarter under review. Further, cumulative PEPFAR filings reached at 18 and received 17 tentative approvals so far. Its R&D spending in biotech increased to Rs.4.90 crore from Rs.2.30 crore. It obtained regulatory consent for conducting phase I clinical trial in Australia for its first biosimilar molecule. It initiated developmental activities for third biosimilar program based on a patented technology. The company is setting up a bio-pharmaceutical facility at Doddaballapur, Bangalore and likely to commission shortly.
The acquisition of CNS divisions of Ranbaxy from Sun Pharma, brands portfolio from Johnson & Johnson in India and a majority stake in domestic branded business of MedispanMedispan has created strong portfolio of niche brands. The acquisition provide the company access to several brands.
The company is spinning off its biotech business into a separate listed entity and intends to retain up to 20 per cent treasury ownership in the demerged entity after necessary regulatory approvals.
For the first half ended September 2015, Shasun's consolidated net sales increased by 6.1 per cent to Rs.642.49 crore from Rs.605.80 crore in the sames period of last year. Its earned a net profit of Rs.16.89 crore as against a net loss of Rs.4.54 crore. Its equity capital increased to Rs.13.45 from Rs.12.03 in the last period. The company successfully completed COFEPRIS inspection (Mexican Regulatory Authority) at Puducherry and Cuddalore API manufacturing facilities.
Meanwhile, Shasun Pharmaceuticals suffered a setback due to fire at new production block during trial & commissioning in Cuddalore API facility on November 16. The damage on account of fire is being assessed and there will not be any significant loss of revenue or production due to the above accident.