Orchid Chemicals and Pharmaceuticals, a Rs 950-crore plus Chennai based pharma major, suffered minor setback during the third quarter ended December 2006 and its standalone net profit declined to Rs 28.32 crore from Rs 28.96 crore in the corresponding period of last year, mainly due to stagnant growth in top line.

The company's net sales increased only by 0.5 per cent to Rs 238.73 crore from Rs 237.60 crore in the last period. Lower profit and enhanced equity capital put pressure on EPS, which worked out to Rs 4.31 as against Rs 4.71.

The standalone net profit for the first nine months period improved by 13.9 per cent to Rs 72.37 crore from Rs 63.52 crore in the similar period of last year. Its nine months net sales touched to Rs 686.17 crore from Rs 647.18 crore, registering a growth of 6 per cent. The EPS for the nine months worked out to Rs 11.01 as against Rs 10.33 in the last period.

The consolidated net sales increased by 3.4 per cent to Rs 721.28 crore during the nine months ended December 2006 from Rs 695.62 crore. Orchid's consolidated net profit increased by 24.4 per cent to Rs 59.90 crore as compared to Rs 48.18 crore in the similar period of last year.

K Raghavendra Rao, managing director, said, "The third quarter of this fiscal has witnessed a further consolidation and growth of our US business based on ramp-up of the notable product introductions made earlier. Ceftriaxone, Cefprozil, Cefazolin and Cefoxitin continue to be key growth drivers. More importantly, a further strengthening of our regulatory pipeline has happened laying the foundation for significant boost in revenues and profits in ensuing quarters. In addition to the existing US FDA approvals, we have secured UK MHRA approvals for certain facilities, which will further broad base and accelerate our regulated market business in US as well as EU. We have substantially ramped up the pace of our filings not only in the US market but also in the EU region. Filings have accelerated in the newer product groups of non-antibiotics as well."

On a consolidated basis, the company's profitability during the nine months of this fiscal has already exceeded the profitability level achieved during the full year of last fiscal which augurs well for the future, observed Rao.

The earlier launched first-wave generic products like Cefoxitin and Cefprozil have gained market share and volume growth in the process more than compensating limited price erosion. Orchid has also ramped up its Cefazolin injection business. Orchid has successfully converted its API business in the US for this product into formulation supplies for other major generic players as well thus achieving a dominant market share of over 80 per cent.

With increasing demand, Orchid expects this product to continue to be a key contributor of revenues during the last quarter of this fiscal. Growth in the ensuing quarters will be driven by approvals for premium first-wave generic products expected.

During the quarter, Orchid achieved a significant ramp up in its regulatory filing calendar. Drug Master Files (DMFs) and Abbreviated New Drug Applications (ANDAs) for key products have been filed taking the cumulative count of filings to 39 DMFs and 34 ANDAs in the US. Of the DMFs filed, 24 pertain to the Cephalosporin product range, 13 to the non-penicillin, non-cephalosporin (NPNC) range and 2 to the penicillin product space. Similarly among the ANDAs filed till date 25 are in the Cephalosporin segment, 7 in the NPNC space and 2 in the penicillin product segment. As of date, Orchid has received approvals from the US FDA for 18 ANDAs.

In the EU region, Orchid has till date filed 10 dossiers for MAs (Marketing Authorisations) all of which pertain to the Cephalosporin range of products.

Filings in the newer therapeutic areas of NPNC products have also increased. While 13 DMFs and 7 ANDAs have been filed in the NPNC space, several key products are under various stages of API and formulation development. More filings in this segment are planned in the last quarter of this fiscal.