Mumbai-based Veronica Laboratories' talks regarding export plans of its products in Australia and Poland have failed. Senior company officials said the talks have only been put on hold and not failed entirely. The company had been holding talks with Australia's Pan Pharmaceuticals and Poland's US Pharmacia for marketing its products there.
The reason for the stoppage of the talks being, "Australia's Pan Pharmaceuticals being probed over several legal issues in Australia, we thought it is not the right time for a tie up. Regarding the Polish firm, we have yet to reach settlement on matters like profit sharing and distribution rights," said Ulhas Deosthale, director, Veronica Labs.
Outside sources however said the lack of a GMP approved facility has led towards failure of talks with these firms. Veronica's talks with the Australian firm predominantly focused over marketing its anti-AIDS drug, Herbovera, there. "Veronica has not yet successfully completed the clinical trials of the drug in India. How it could then expect permission from Australia's regulators TGA. Moreover, Veronica's manufacturing facility is not having a TGA certification neither any of its contract manufacturers are TGA certified," said a source.
Veronica official has also ruled out any immediate export plans, as its current focus will be to cement hold on the domestic market before eying overseas. "Our immediate aim is to be a well-known profitable company in the domestic market before any steps to go beyond," said Deosthale.
Veronica Labs currently manufactures its beta lactum and painkiller products through contract manufacturing. Anti-AIDS drug is also in the offing.
In the meanwhile, the company has appointed Jacobs H&G as consultants for the construction of a WHO-GMP green field facility at Rabale in Navi Mumbai. This fact alone highlights that the company is not, at least for the time being, interested in the developed markets of Australia and Europe.
A huge expenditure is essential for the conversion of a facility into a US-FDA or TGA approved and Veronica Labs is not a cash rich company.
The share value of Veronica Labs has deteriorated to Rs.6 from Rs.33 in January. The company's debt now stands at about Rs. 2 crore. In January, the board had plans to issue equity shares of Rs. 10 on a preferential basis to corporate bodies at a price of Rs. 50 and in the process converting a loan of Rs. 2.02 crore into equity at a premium of 50 per cent over the then market price of Rs. 33. This attempt however failed. It also had the plans to increase its authorized capital from Rs. 10.25 crore to Rs. 20 crore, which also did not go through.
Nevertheless, the company has applied for a loan of about Rs. 7.5 crore for its upcoming plant at Navi Mumbai and is confident of clearing it, said a reassured Deosthale.