The Chennai based Shasun Chemicals and Drugs Limited (SCDL) is planning to develop some new APIs and for this purpose is setting up a multi-product facility at Vizagapatanam in Andhra Pradesh.

The pilot plant is likely to be operational by September 2007. The APIs developed in this plant will be entirely different from the spectrum of Shasun's existing generic and matured drugs portfolio.

Shasun's plans are to put up a multi-product (non-dedicated) pilot plant facility. The plant will also be utilised for contract manufacturing services business. Shasun will invest around Rs. 45 crore in the first phase, followed by a multi-product commercial facility with an additional investment of Rs.55 to 60 crore.

"The Vizag plant will produce API, for the formulations prepared in our own plant, for the companies under CRAMS business. The geographical focus would be regulated markets and we expect regulatory approvals to be in place by June 2008," said S. Vimal Kumar, joint managing director, SCDL.

Shasun has 11 DMFs to its credit at present and is also planning to file five more DMFs during current financial year.

The company at present holds 26% of the 17,000-tonne world market of anti-inflammatory drug Ibuprofen with 4,500 tonne production in its API facility at Pondicherry, dedicated for Ibuprofen manufacturing. The company has two API manufacturing facilities at Pondicherry and Cuddalore, both cGMP compliant facilities and inspected by US FDA, UK MHRA, EDQM, TGA and other regulatory bodies.

Shasun's gross revenue, Rs 370.05 crore, which increased by 9.7 per cent from Rs 337.33 crore in the previous year, has its major share from the API business. Shasun had a 6% growth in its API export with total exports of Rs.260 crore in the last year.

As per FY05-06 figures, the Ibuprofen bulk business contributes 46% of total sales when compared to the 49% business in FY 05. Another two major APIs from Shasun, Nizatidine and Ranitidine bulk business accounts for 20% and 14% of total revenue in the FY05-06.

The company hopes to maintain the sales of ibuprofen in market, with its derivatives such as Ibuprofen Lysinate, Ibuprofen Sodium apart from S+Ibuprofen, though the margin continued under pressure in last year for the product due to spiralling cost of raw materials and utilities, according to company sources. The sales of Ranitidine, the anti-ulcerant, was down by 11.7% in the last fiscal year due to strategic reason of minimizing the sales to the markets where it was not yielding the desired returns, they added.

Shasun enjoys more than 90% of the global market share of the anti-ulcerant drug Nizatidine, with Eli Lilly as its major costumer. Nizatidine production registered a growth of 22% during the last financial year, thanks to increased offtake by Eli Lilly. The popular brands of the formulation of Nizatidine are Axid and Acinon from the Shasun stable.

As the part of expanding its product portfolio, the company has tied up with two Indian pharma majors for supply of Gabapentine API, an anti-epilepsy drug. Though the company sources refused to reveal much about the tie up, they said that the company expects considerable revenue from this product since 2007-08. The company is also discussing with various international pharma companies for manufacturing APIs and intermediates under contract. Currently, the company has API supply tie-ups with major companies including Boots Chemical, Eli Lilly, Glaxo Smithkline and Reliant Pharma.

The Contract research and manufacturing services (CRAMS), one of the growing segment of the company accounted for 10% of its gross revenue at Rs.370 crore in FY06, which marked a growth from the 8% of the total revenue in FY05. During the financial year 2005-06, the company reported a growth in CRAMS business as revenues grew by 49 percent to Rs.36.60 crore.

The main focus of this business is Contract Manufacturing Technologies like Hydrolytic Kinetic Resolution (HKR), Aromatic Bond Formation (ABF) and Radical Trifluoromethylation, with patents are part of this transaction. All products and building blocks related to these technologies, which include associations with scientists at Harvard and MIT are also part of the transaction. Shasun expects revenue of USD 72 million from Rhodia in the present year.