The Andhra Pradesh-based Arch Pharmalabs Ltd, a leading manufacturer of drug intermediates and APIs, has bought the entire API business of Vitalife Labs for a consideration of Rs 26.5 crore. The Gurgaon-based Vitalife Labs is a division of the Apollo International Ltd.

The Rs 97-crore Arch Pharmalabs is a global leader in the Isoxazole Penicillins side-chains market. The company has the production capacity of over 1100 tonnes and some of its top customers are Sandoz, DSM Group, Ranbaxy and Dr. Reddy's.

Arch Pharmalabs was formed with the merger of Andhra Pradesh-based bulk drug manufacturer, Merven Drug Products Ltd (MDPL) with the Mumbai- based Arch Commerz Pvt Ltd.

According to the sources, the Swiss Technology Venture Capital Fund, a private equity Fund sponsored by the State Secretariat for Economic Affairs of the Swiss Federal Government, has invested Rs 90 million in the company thereby acquiring 19 per cent equity stake in the company.

India Advantage Fund - II represented by ICICI Venture has also invested in 6 per cent equity of the company at the rate of Rs 38.65 per share with an option to invest in further 5 per cent, the sources added.

The Company has manufacturing facilities at Hyderabad, Badlapur and Tarapur. A corporate R&D facility is said to be coming up at Badlapur facility at a capital cost of Rs 20 million. The corporate office of Arch Pharmalabs is situated at Andheri, Mumbai.

Arch Pharmalabs Ltd has performed well during the first half of 2004-'05. Its net sales went up sharply by 66.2 per cent to Rs 73.63 crore from Rs 44.30 crore in the corresponding period of last year. Export earning during this period increased nearly by 80 per cent to Rs 55.21 crore. The Company's net profit moved up by 22.2 per cent to Rs 6.32 crore from Rs 5.17 crore in the similar period of last year.

The Company has made a net profit of Rs 8.93 crore in the year ended on 31.03.04. The export sale has touched Rs 72.21 crore, worked out to 75 per cent of its total net sales while the domestic sales stand at Rs 24.24 crore in the same period. The earning per share worked out to Rs 10.23.

Vitalife Laboratories has a state-of-the-art manufacturing facility as per cGMP located at Gurgaon. The company is manufacturing APIs including Fluconazole, AtorvastatinCalcium, Fexofenadine HCL, Rabeprazole Sodium, Glimepride, Gabapentin. The company had made a net sale of Rs 3 crore in the year 2002.