The Chennai based Orchid Chemicals & Pharmaceuticals Ltd., a US $ 160 million company was incorporated in 1992 and started with manufacturing of API cephalosporins.In a short span of 12 years, the company has grown toone among the top-four cephalosporin manufacturers in the world, with the largest product range in this segment with over 40 products. The company is specialized in the manufacture of APIs, intermediates and nutraceuticals as well as finished dosage forms for the global markets, and is emerging as a specialty manufacturer of several antibiotics and non-antibiotic products.

Orchid is in the process of achieving a big leap in this growth, by penetrating the regulated markets in a big way. An interview with Dr C Bhakthavatsala Rao, Deputy Managing Director, Orchid Chemicals & Pharmaceuticals Ltd.

Since itsstartin February 1994 Orchid has been diversifying in a major way into formulations, nutraceuticals etc. Is it possible to maintain this kind of a growth rate in future as well?

In the first decade of operations, our focus has been on specializing on a particular chosen field and to become a market leader in that segment. In thefield of anti-infectives with a global market potential of USD 30 billion, cephalosporins and its combinations is the largest segment with a market size of about USD 10 billion and with about 60 products. The regulated markets of US, Europe and Japan accounts for 70 per cent of the cephalosporin market. Our success so far has been only by tapping the less regulated markets and we are on the threshold of tapping the high potential in the regulated markets, in a big way. There is therefore an enormous growth potential for the company.

For the last few years, we have been concentrating to create requisite capacity and world class manufacturing facilities to tap the potential in the regulated markets. Now we have eight Certificates of Suitability (CoS) approvals from the European Directorate for the Quality of Medicines (EDQM).

We have filed 134-process patent applications covering the US, PCT, EU, India (WTO) and other patent offices.Of these, 8 patents have already been granted and others are under various stages of examination or publication. We have also filed 11 US DMFs and 18 EU DMFs for APIs, and four ANDAs with the USFDA for formulations. We have identified 15 high value products from our cephalosporin product basket for the US market, which is the largest range in this category. We hope to file 11 more ANDAs with the USFDA during the current fiscal.

Among the international alliances, your Chinese joint venture has started contributing to your revenue. How do you foresee the growth for Orchid in China?

China is the second largest cephalosporin market with 22.5 per cent of the market, and the Indian companies control about 15 per cent of this market. Four Indian companies are the main operators in China and each of these companies has its own core products to penetrate the market. However, no one is into cephalosporin manufacture as we are. The second phase of the plant of our Chinese joint venture, NCPC Orchid Pharmaceutical Company Ltd. became operational since January 2004. This fiscal is the first full year of operations for our China JV. We hope to post a turnover of about 20-25 million USD during this fiscaland are confident of significant growth in the future years.

Research and drug development is one among your major thrust areas. Could you kindly detail some of the ongoing research activities…

At present Orchid is working on four leads in the anti-inflammatory segment and six in the anti-infection category. We plan to take at least one lead molecule in each of these segments to the phase I stage during the current fiscal itself. Apart from this, our Bexel joint venture is working on four select leads which are in the pre-clinical stage. The JV is developing select leads for a unique non cox- 2 inhibitor anti-inflammatory drug and a novel anti-obesity drug. Apart from this, under the Orchid's platform, the JV works on an oxazolidinone anti-infective and a cox-2 anti-inflammatory drug. We hope this will move to Phase I trials within a few months.

The anti-diabetes molecule BLX - 1002 developed by the JV has completed phase I human trials and is undergoing phase II (a) limited patient trial in Europe. Based on the phase I (a) and (b) results, the molecule had received approval from the Independent Ethics Committee (IEC) to proceed with trials in Europe on diabetic patients to establish further safety of the molecule with possible efficacy profiles. The clinical trials are likely to be completed within the next three months and we hope we can outlicense that molecule soon after that period.