Leading firms based in Gujarat have successfully overcome the toughest year 2004-05 and are now moving ahead strongly with major focus on expansion, export market, research & development and new products. The introduction of new patent laws, MRP based excise duty, implementation of VAT and stiff competition in domestic and international markets put pressure on business operations. However, the pharma companies started moving smoothly in the first quarter of the current year and are set to achieve all-round performance in the year 2005-06.
The four major pharmaceutical companies from Gujarat viz., Alembic Ltd, Cadila Healthcare, Dishman Pharmaceuticals & Chemicals and Torrent Pharmaceuticals with net sales above Rs 150 crore in the year 2004-05, have reported improved performance during the first quarter ended June 2005. The net sales of these four companies increased by 23.1 per cent to Rs 692.08 crore in the first quarter from Rs 562.46 crore in the corresponding period of last year. The net profit went up sharply by 48.3 per cent to Rs 100.23 crore from Rs 67.60 crore in the similar period of last year. These companies operations are covering major segments like cardiovasculars, gastrointestinals, women's healthcare, respiratory, pain management and anti-infectives.
Cadila Healthcare Ltd, the tenth largest pharmaceutical company in India with net sales of Rs 1063 crore, has received US FDA approval for three more ANDAs during the first quarter. The consolidated net sales for the quarter ended June 2005 increased to Rs 366 crore from Rs 330 crore. Dishman Pharmaceuticals incurred a capital expenditure of Rs 14.49 crore during the quarter ended June 2005. The sales through contract research and manufacturing segment (CRAMS) went up to Rs 14.96 crore from Rs 6.26 crore. Torrent Pharmaceuticals has acquired Heumann Pharma GmbH & Co Generika KG (Heumann) through its German subsidiary during the first quarter. Heumann is engaged in the marketing and distribution of generic pharmaceutical products in Germany. Torrent Pharma is setting up a formulation manufacturing facility at Himachal Pradesh and expanding the existing bulk drug capacity as well as R&D operations in Gujarat.
The Gujarat based pharma companies are spending significant amount on R&D activities to strengthen their international presence. The aggregate amount spent on R&D during 2004-05 worked out to Rs 205.61 crore or 9-10 per cent of the total net sales. Cadila Healthcare incurred R&D expenditure of Rs 103 core and worked out to 9.17 per cent its total turnover. Followed by Torrent Pharma with an R&D expenditure of Rs 67.32 crore (14.3 per cent of total turnover) and Alembic of Rs 31.12 crore (5.44 per cent). Dishman is spending only a meager amount on R&D activities. These investments in R&D will assist these companies to boost their turnover in next couple of years.
With the help of own R&D activities, Cadila Healthcare launched over 60 new products and brand extensions under various therapeutic segments. The company launched Nucoxia (etoricoxib) successfully in the domestic market. It launched Pitava, the first pitavastatin brand and Parcar to treat Parkinson's disease. The sales through new products worked out to 2 per cent of the sales of domestic formulations during 2004-05. Cadila filed 12 ANDAs and 16 DMFs and several dossiers for developing and semi regulated markets. Torrent Pharma invested Rs 67.32 crore on R&D activities and its R&D centre is engaged in the discovery of new chemical entities for vascular complications and metabolic disorders. The company has taken up a project in collaboration with AstraZeneca AB. Torrent has launched 22 new formulations in the domestic market and developed 14 formulations for Europe, Russia and Brazil. The company filed its first DMF and ANDA in April 2005.
Alembic Ltd has launched 23 new product including line extensions during 2004-05, which contributed 4.5 per cent of its total sales. The company filed patent for 43 APIs and intermediates. The company incurred R&D expenditure of Rs 31.12 crore for the year 2004-05. Alembic launched the country's first zero calorie sugar substitute. Its brand 'Zero' differentiates itself from the other sugar substitutes in the market on the fact that it is made on the molecule sucralose and does not contain aspartame. The company is now offering CRAMS. The company's Althrocin and Glycodin enjoy a market share of 74 per cent and 79 per cent respectively.
The investment in R&D and focus on lucrative regulated market by these four companies will boost the exports earnings despite stiff competitions and higher marketing expenses. The aggregate export earnings of Alembic, Cadila, Dishman and Torrent increased only marginally by 0.2 per cent to Rs 430.68 crore from Rs 429.95 crore in the 2003-04. Alembic and Cadila received setback on export front due to competitive pricing pressure. Alembic's exports' declined 14.8 per cent to Rs 105.91 crore from Rs 124.29 crore mainly due to fall in price of Penicillin G. The export earnings of Cadila declined to Rs 138 crore from Rs 177.30 crore due to stiff competition in the international market. Though Alembic and Cadila suffered heavy setback on export front, Torrent and Dishman improved export earnings during 2004-05. Torrent recorded export earnings of Rs 80.88 crore as compared to Rs 44.94 crore and Dishman's exports moved up to Rs 105.89 crore from Rs 83.42 crore.
Torrent has set up subsidiaries in Brazil - Torrent do Brasil Ltda - to look after entire Brazilian market. The company has strengthened its focus on Russia and CIS countries during 2004-05 and its subsidiary Zao Torrent Pharma registered a double digit growth. The company commenced exports of Lamotrigine to the EU market, thereby accomplishing an important milestone in its foray into regulated generic markets.
The pharmaceutical companies in Gujarat are investing in expansion programmes to cater the rising demand from the domestic as well as international market. Cadila has set up a new formulations manufacturing facility at Baddi in Himachal Pradesh for the manufacture of solid orals with a capacity of 200 million tablets per annum and 10 million hard gel capsules. It has commissioned facility for hormone products at Moraiya. With US FDA approval for its Moraiya facility, the company signed two contract-manufacturing deals viz., Zambon, Italy and Mayne Pharma, Australia during 2004-05.
Alembic commissioned US FDA and EDQM approved API plant at Panelav and is now building 5 block multi-product facility, which will also support a pilot plant. Torrent received approval from MHRA of UK, TGA of Australia, MCC of South Africa and ANVISA of Brazil for its oral solid formulation facility. The company is now implementing further expansion of this plant, which is likely to be commissioned shortly.
Dishman entered an agreement with a leading British Company NU Scaan for the development and manufacture of bulk activities for neutraceutical products. It has acquired the business from C6, UK. Dishman is setting up a joint venture project with Arab Company for Drug Industries and Medical Appliances for setting up a JV project initially to manufacture 20 APIs. ACDIMA is promoted by 18 Arab Nations.
Coming back to financial performance for the year 2004-05, the aggregate net sales and net profit of Alembic, Cadila, Dishman and Torrent increased only 3.4 per cent and and 3 per cent respectively. Except Alembic, all other three companies improved sales. Alembic sales declined to Rs 524.46 crore fromRs 556.46 crore. However, its net profit improved to Rs 51.82 crore from Rs 31.26 crore. Cadila suffered setback on profit front and its net profit declined to Rs 131 crore from Rs 143 crore. Torrent's net also declined to Rs 52.92 crore from Rs 64.17 crore.
The aggregate equity capital stood at Rs 93.98 crore and reserves & surplus touched to Rs 1277 crore as against Rs 1034 crore, a growth of 23.5 per cent. Gross fixed assets including capital work-in-progress increased by 17.1 per cent to Rs 2053 crore from Rs 17.53 crore. Cadila and Torrent maintained the equity dividend at 120 per cent and 80 per cent respectively during 2004-05 and Alembic and Dishman stepped up equity dividend to 30 per cent and 25 per cent respectively.
With focus on export markets, investment in R&D activities, expansion of capacities with eye on regulated approvals, new launches and tie-ups with international giants will give necessary boost to operations in next couple of years. There was significant growth in sales and net profit for the first quarter of 2005-06 and considering the present trend these companies will achieve a growth of 20-25 per cent in 2005-06 with higher returns to investors.
Cadila launches 60 new products; Torrent forays EU
acquired Heumann Pharma GmbH & Co Generika KG (Heumann) through its German subsidiary during the first quarter. Heumann is engaged in the marketing and distribution of generic pharmaceutical products in Germany. Torrent Pharma is setting up a formulation manufacturing facility at Himachal Pradesh and expanding the existing bulk drug capacity as well as R&D operations in Gujarat.
The Gujarat based pharma companies are spending significant amount on R&D activities to strengthen their international presence. The aggregate amount spent on R&D during 2004-05 worked out to Rs 205.61 crore or 9-10 per cent of the total net sales. Cadila Healthcare incurred R&D expenditure of Rs 103 core and worked out to 9.17 per cent its total turnover. Followed by Torrent Pharma with an R&D expenditure of Rs 67.32 crore (14.3 per cent of total turnover) and Alembic of Rs 31.12 crore (5.44 per cent). Dishman is spending only a meager amount on R&D activities. These investments in R&D will assist these companies to boost their turnover in next couple of years.
With the help of own R&D activities, Cadila Healthcare launched over 60 new products and brand extensions under various therapeutic segments. The company launched Nucoxia (etoricoxib) successfully in the domestic market. It launched Pitava, the first pitavastatin brand and Parcar to treat Parkinson's disease. The sales through new products worked out to 2 per cent of the sales of domestic formulations during 2004-05. Cadila filed 12 ANDAs and 16 DMFs and several dossiers for developing and semi regulated markets. Torrent Pharma invested Rs 67.32 crore on R&D activities and its R&D centre is engaged in the discovery of new chemical entities for vascular complications and metabolic disorders. The company has taken up a project in collaboration with AstraZeneca AB. Torrent has launched 22 new formulations in the domestic market and developed 14 formulations for Europe, Russia and Brazil. The company filed its first DMF and ANDA in April 2005.
Alembic Ltd has launched 23 new product including line extensions during 2004-05, which contributed 4.5 per cent of its total sales. The company filed patent for 43 APIs and intermediates. The company incurred R&D expenditure of Rs 31.12 crore for the year 2004-05. Alembic launched the country's first zero calorie sugar substitute. Its brand 'Zero' differentiates itself from the other sugar substitutes in the market on the fact that it is made on the molecule sucralose and does not contain aspartame. The company is now offering CRAMS. The company's Althrocin and Glycodin enjoy a market share of 74 per cent and 79 per cent respectively.
The investment in R&D and focus on lucrative regulated market by these four companies will boost the exports earnings despite stiff competitions and higher marketing expenses. The aggregate export earnings of Alembic, Cadila, Dishman and Torrent increased only marginally by 0.2 per cent to Rs 430.68 crore from Rs 429.95 crore in the 2003-04. Alembic and Cadila received setback on export front due to competitive pricing pressure. Alembic's exports' declined 14.8 per cent to Rs 105.91 crore from Rs 124.29 crore mainly due to fall in price of Penicillin G. The export earnings of Cadila declined to Rs 138 crore from Rs 177.30 crore due to stiff competition in the international market. Though Alembic and Cadila suffered heavy setback on export front, Torrent and Dishman improved export earnings during 2004-05. Torrent recorded export earnings of Rs 80.88 crore as compared to Rs 44.94 crore and Dishman's exports moved up to Rs 105.89 crore from Rs 83.42 cr.
Torrent has set up subsidiaries in Brazil - Torrent do Brasil Ltda - to look after entire Brazilian market. The company has strengthened its focus on Russia and CIS countries during 2004-05 and its subsidiary Zao Torrent Pharma registered a double digit growth. The company commenced exports of Lamotrigine to the EU market, thereby accomplishing an important milestone in its foray into regulated generic markets.
With focus on export markets, investment in R&D activities, expansion of capacities with eye on regulated approvals, new launches and tie-ups with international giants will give necessary boost to operations in next couple of years. There was significant growth in sales and net profit for the first quarter of 2005-06 and considering the present trend these companies will achieve a growth of 20-25 per cent in 2005-06 with higher returns to investors.