Caraco Pharmaceutical Laboratories Ltd has signed an R & D agreement, which has been approved by its independent Directors, for development of up to 25 new generic drugs with Sun Pharma Global Inc, a wholly owned subsidiary of Sun Pharmaceutical Industries Ltd, Narendra N. Borkar, Chief Executive Officer, announced.
Detroit based Caraco Pharmaceutical Laboratories Ltd, develops, manufactures and distributes generic prescription drugs to nation's largest wholesalers, distributors, drugstore chains and healthcare systems. Sun Pharmaceutical Industries Ltd, a major Caraco stockholder, is India's fifth largest pharmaceutical company. Sun Pharma operates 8 manufacturing locations and two worldclass R & D Centers in India. A public company, Sun Pharma is ranked among India's top 50 companies by market cap and holds a leading rank among speciality customers such as psychiatrists, cardiologists, neurologists, etc in the country.
The key purpose of the new agreement is to provide for direct transfer of R&D based intellectual property in the form of drug technologies to Caraco, in order to quickly and efficiently expand Caraco's product line.
According to terms of the agreement, Sun Global will provide upto 25 new generic drugs to Caraco over a five-year period. In return, Sun Global will receive 544,000 shares of a newly created, preferred Caraco stock for each new drug transferred. These preferred shares are convertible after 3 years, on one-to-one basis, to Rule 144 common shares.
Under previous agreement with Sun Pharma, Caraco received technology for two DESI products and 11ANDA products from Sun Pharma and has received FDA approval for seven of these generic drugs over the past five quarters. These are Clozapine, a generic form of Novartis' Clozaril; Metformin hydrochloride, a generic form of Bristol Myers Squibb's Glucophage; Oxaprozin, a generic form of G.D Searle's Daypro; Carbamezapine(chewable), a generic form of Novartis' Tegretol; Clonazepam, a generic form of Roche's Klonopin; Tramadol hydrochloride, a generic form of R.W. Johnson Pharma Research Institute's Ultram and Ticlopidine Hydrochloride, a generic form of Hoffman LaRoche's Ticlid.
Buoyed by the introduction of new products, Caraco reported record third-quarter sales and the company's first ever net profit. It raised its sales guidance from $16-18mill to $ 21 million for the calendar year 2002.
The Company has 4 drugs pending FDA approval and expects to receive a go-ahead to market one of these by the year-end.
Borkar said, "This is a decidedly accretive step for our company and shareholders. The new R&D agreement provides us with the resources and platform to expand our product line, grow sales, and improve our earnings picture."