New drug unit to improve CRAMS operations
Dishman Pharmaceuticals & Chemicals Ltd (Dishman), is setting up a Rs.350mn US
FDA and MHRA approvable drug formulation unit at the Bavla plant in Gujarat. In fact,
this facility will be designed to provide complete package of CRAM services, right from
Contract research to Dosage forms, satisfying the entire drug life cycle. The company
plans to finance this investment through internal cash accruals.
Following this arrangement, Dishman is in the process of finalizing a deal with a client
for orders which will account for 30% of the unit’s capacity from its inception. This unit
will however make drugs on a contract basis for its clients. The company has no plans
to enter the generic formulations market.
Multiple expansions to power earnings
Dishman, during FY09 commissioned 4 new plants at its Bavla facility, of which one
has been exclusively apportioned to manufacture Eprosartan API for Solvay that has
increased the Eprosartan capacity from 60tpa to 200tpa. On the similar lines, the
company has assigned one of its other plants to meet the requirements of AstraZeneca’s
14 API supply agreement. Another, two plants have been visited by large MNC pharma
companies like GSK, Pfizer, Novartis and have expressed their interest in entering into
manufacturing contracts going forward.
Alongside, the new Bavla Hi-Potency facility (which is under construction and will
manufacture cancer products for Carbogen-Amcis) is expected to start its operations
from June 2009 ensuring robust earning visibility. Further, additional traction is expected
out of the China facility which is likely to be commissioned from July 2009.
On top of the recent facility expansions (which is the prime indicator growth in CRAMS
business model), the new set up of Rs.350mn drug formulation unit at Bavla indicates
huge potential awaiting in the CRAMs segment for the company. Likewise the recent
agreement with Europe based - Polpharma for co-operative & joint API development
ensures additional contract research & manufacturing business flow for Dishmans’
new facilities.--- L.KANNAN
