MIRA
INFORM REPORT
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Report Date : |
19.06.2007 |
IDENTIFICATION DETAILS
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Name : |
ORCHID CHEMICALS AND PHARMACEUTICALS LIMITED |
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Registered Office : |
‘ |
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Country : |
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Financials (as on) : |
31.03.2006 |
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Date of Incorporation : |
01.07.1992 |
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Com. Reg. No.: |
18-22994 |
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CIN No.: [Company
Identification No.] |
L24222TN1992PLC022994 |
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TAN No.: [Tax
Deduction & Collection Account No.] |
CHEO03079G/CHEO00121C |
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Legal Form : |
Subject is a public limited liability company. The company’s shares are listed on the Stock Exchanges. |
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Line of Business : |
Manufacturers and Sellers of Pharmaceutical Products and Bulk Drugs. |
RATING & COMMENTS
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MIRA’s Rating : |
Aa |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
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Maximum Credit Limit : |
USD 31000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular |
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Litigation : |
Clear |
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Comments : |
Subject is a well established company doing very well. Available information indicates high financial responsibility of the company. Financial position is good. Payments are correct and as per commitments. The company can be considered good for any normal business dealings. It can be regarded as a promising business partners in a medium to long-run. |
LOCATIONS
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Registered Office : |
‘ |
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Tel. No.: |
91-44-2825 1532 / 2825 1547 / 2828 4776 |
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Fax No.: |
91-44-2828 4983 |
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E-Mail : |
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Website : |
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Head Office : |
‘ |
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Factory 1 : |
API
FACILITIES Alathur Works Plot Nos. 85-87, 98-100, 126-131, 138-151
and 159-164, SIDCO Industrial Estate, Alathur, Kancheepuram Dist. – 603 110,
Tamilnadu, India L-8 & L-9, MIDC Industrial Area,
Waluj, Dist.– 431 136, Maharashtra, FORMULATIONS Plot Nos. A-10, A-11, SIDCO Industrial
Estate, Alathur, Kancheepuram Dist. – 603 110, B3 & B4, B11 to B14, SIDCO Industrial
Estate, Alathur, Kancheepuram Dist. – 603 110, B77, SIDCO Industrial Estate, Alathur,
Kancheepuram District – 603 110, Tamilnadu Plot Nos. B3-B6, Vinay Bhavya Complex, No. 159A, I Floor,
‘A’ Wing, C S T Road, Kalina, Santacruz, Mumbai – 400 098, Maharashtra |
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R & D Centre : |
Ř
Plot No. 476 / 14, Ř
Plot No. B21-B23 and B31-B33, |
DIRECTORS
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Name : |
Mr. R. Narayanan |
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Designation : |
Chairman |
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Name : |
Mr. K.
Raghavendra Rao |
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Designation : |
Managing Director |
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Date of Birth/Age : |
44 years |
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Qualification : |
B.Com., PGDM
(IIM-A), ACS, AICWAI |
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Experience : |
24 years |
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Date of Appointment : |
13.07.1992 |
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Previous Employment : |
Al Buraimi Group,
Sultanate of |
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Name : |
Dr. C.
Bhaktavatsala Rao |
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Designation : |
Deputy Managing
Director |
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Date of Birth/Age : |
53 years |
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Qualification : |
B.E., M. Tech.,
Ph. D. |
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Experience : |
29 years |
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Date of Appointment : |
19.08.1998 |
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Previous Employment : |
Ashok Leyland
Limited, Deputy General Manager – Corporate Planning |
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Name : |
Dr. I. Seetharam
Naidu |
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Designation : |
Director |
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Name : |
Mr. Subramanian
Andi |
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Designation : |
Director (IDBI
Nominee) |
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Name : |
Mr. Anil Thadani |
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Designation : |
Director |
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Name : |
Dr. Francis Pinto |
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Designation : |
Director |
KEY EXECUTIVES
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MANAGEMENT TEAM |
Shri D S Bhaskara Raju - President - Finance & Business Planning Dr Gautam Kumar Das - President - Active Pharmaceutical Ingredients Dr Sumant Baukhandi - President - Regulatory Affairs & Quality
Assurance Ms Edna Braganza - Senior Vice
President - International Marketing & Procurement Shri Kalidindi V Raju - Senior Vice President - Manufacturing Shri S Mani - Senior Vice President - Manufacturing Shri Ashutosh Ojha - Country Head (Domestic Formulations) Shri L Chandrasekar - Vice President - Internal Audit & Co.
Secretary Shri P N Deshpande - Vice President - Production & Technical Shri C R Dwarakanath - Vice President - Corporate Safety, Health &
Environment Shri Imtiyaz Basade - Vice President - Regulatory Affairs Shri S Krishnan - Vice President - Finance Dr S Mahender Rao - Vice President - Chemical Development Shri Makarand M Deshpande - Vice President - International Marketing Shri S Nammalvar - Vice President - Projects & Engineering
Services Shri K C Pathak - Vice President - PPIC & Outsourcing Dr Praveen Reddy - Vice President - Pharma Research Shri K Ramesh - Vice President - Analytical Development Shri M S Rangesh - Vice President - Human Resources Shri Satish Haribhau Joshi - Vice President - Quality Assurance Dr U P Senthil Kumar - Vice President - Chemical Development Shri Umesh D Kapre - Vice President - Manufacturing |
MAJOR SHAREHOLDERS / SHAREHOLDING PATTERN
As on 31.03.2007
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Names of Shareholders |
No. of Shares |
Percentage of Holding |
Promoters'
holdings
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indian
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Individuals / Hindu Undivided Family |
12545757 |
19.06 |
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Central Govt. / State Govt. |
-- |
-- |
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Bodies Corporate |
2436915 |
3.70 |
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Financial Institutions / Banks |
-- |
-- |
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Any other (specify) |
-- |
-- |
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Sub total (A)(1) |
14982672 |
22.76 |
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FOREIGN |
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Individuals (Non-resident individuals /
foreign individuals) |
-- |
-- |
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Bodies Corporate |
-- |
-- |
Institutions
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-- |
-- |
Any Other (Specify)
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-- |
-- |
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Sub total (A)(2) |
-- |
-- |
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Total Shareholding of
Promoter and Promoter Group (A)=(A)(1)+(A)(2) |
14982672 |
22.76 |
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PUBLIC SHAREHOLDING |
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Institutions
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Mutual Funds / UTI |
3535527 |
5.37 |
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Financial Institutions / Banks |
4968879 |
7.55 |
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Central Govt. / State Govt. |
-- |
-- |
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Venture Capital Funds |
-- |
-- |
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Insurance Companies |
-- |
-- |
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Foreign Institutional Investors |
9495796 |
14.43 |
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Foreign Venture Capital Investors |
-- |
-- |
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Any other (specify) |
-- |
-- |
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Sub total (B)(1) |
18000202 |
27.35 |
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NON-INSTITUTIONS |
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Bodies Corporate |
6177312 |
9.39 |
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Individuals - ii) Individual shareholders holding nominal share capital in excess of
Rs. 0.100 million |
9414503 1583443 |
14.31 2.41 |
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Any other (specify) ˇ
NRI (R) ˇ
NRI (NR) ˇ
Foreign Collaborator ˇ
Foreign Companies ˇ
Overseas Corporate Bodies |
344406 67869 15000 15229534 1350 |
0.52 0.10 0.02 23.14 0.00 |
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Sub total (B)(2) |
32833417 |
49.89 |
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Total Public
Shareholding (B)=(B)(1)+(B)(2) |
50833619 |
77.24 |
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TOTAL (A) +
(B) |
65816291 |
100.00 |
BUSINESS DETAILS
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Line of Business : |
Manufacturers and Sellers of Pharmaceutical Products and Bulk Drugs. |
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Products : |
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Brand Names : |
The company sells its products under the brand name "Tax-o-Bid", "Cefogram", "Orzid", "Spizef", "N-Lid DT", "N-Lid Gel", "N-Lid Suspension" and "Orchidol". |
PRODUCTION STATUS
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Particulars |
Unit |
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Licensed
Capacity |
Installed
Capacity |
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Bulk Drugs and Intermediates |
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Oral and Sterile |
MT |
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900 |
800 |
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Formulations |
No. Millions |
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748 |
748 |
GENERAL INFORMATION
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Bankers : |
v
Bank of v Canara Bank v Citibank N. A. v
Export-Import Bank of v ICICI Bank Limited v IDBI Bank Limited v Indian Bank v Punjab National Bank v
State Bank of v
Union Bank of v
Bank of v Allahabad Bank v Federal Bank v
State Bank of v UTI Bank Limited |
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Facilities : |
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Banking
Relations : |
Good |
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Auditors : |
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Name : |
STATUTORY AUDITORS SNB Associates Chartered Accountants No. 12, 3rd Floor, Gemini Parsn Complex, 121, Anna Salai, Chennai – 600 006, Tamil Nadu COST AUDITORS Mr. V. Kalyanaraman Cost Accountants No. 4 (Old No. 12), INTERNAL / Deloitte Haskins & Sells Chartered Accountants 476, |
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Memberships : |
Nil |
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Collaborators : |
Nil |
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Associates : |
Orchid Research Laboratories Limited |
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Subsidiaries: |
v
Orchid Europe Limited, v
v
Gene Arrays Inc., v
Orchid Pharmaceuticals Inc., |
CAPITAL STRUCTURE
Authorised Capital :
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No. of Shares |
Type |
Value |
Amount |
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9,00,00,000 |
Equity Shares |
Rs. 10/- Each |
Rs. 900.000
Millions |
Issued, Subscribed & Paid-up Capital :
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No. of Shares |
Type |
Value |
Amount |
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6,46,18,182 |
Equity Shares |
Rs. 10/- Each |
Rs. 646.182
Millions |
FINANCIAL DATA
[all figures are
in Rupees Millions]
ABRIDGED BALANCE
SHEET
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SOURCES OF FUNDS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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SHAREHOLDERS FUNDS |
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1] Share Capital |
646.182 |
341.300 |
323.800 |
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2] Reserves & Surplus |
7204.071 |
4371.400 |
3863.200 |
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NETWORTH |
7850.253 |
4712.700 |
4187.000 |
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LOAN FUNDS |
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1] Secured Loans |
8265.585 |
8216.300 |
7101.900 |
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2] Unsecured Loans |
2016.902 |
1650.000 |
500.000 |
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TOTAL BORROWING |
10282.487 |
9866.300 |
7601.900 |
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DEFERRED TAX LIABILITIES |
800.600 |
0.000 |
0.000 |
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TOTAL |
18933.340 |
14579.000 |
11788.900 |
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APPLICATION OF FUNDS |
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FIXED ASSETS [Net Block] |
8898.985 |
6952.700 |
7020.100 |
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Capital work-in-progress |
2691.740 |
3438.400 |
1484.200 |
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INVESTMENT |
982.369 |
712.600 |
523.100 |
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CURRENT ASSETS, LOANS & ADVANCES |
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Inventories |
4380.772
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3935.400
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2742.800 |
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Sundry Debtors |
3288.153
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1978.000
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1502.700 |
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Cash & Bank Balances |
112.959
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202.700
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215.200 |
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Other Current Assets |
5.074
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0.000 |
0.000 |
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Loans & Advances |
980.351
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1215.400 |
746.700 |
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Total
Current Assets |
8767.309
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7331.500 |
5207.400 |
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Less : CURRENT
LIABILITIES & PROVISIONS |
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Current Liabilities |
2407.063
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3656.100
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2274.700 |
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Provisions |
0.000
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200.100
|
171.200 |
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Total
Current Liabilities |
2407.063
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3856.200 |
2445.900 |
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Net Current Assets |
6360.246
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3475.300 |
2761.500 |
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TOTAL |
18933.340 |
14579.000 |
11788.900 |
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PROFIT & LOSS
ACCOUNT
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PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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Sales Turnover |
8734.571 |
6776.670 |
7585.200 |
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Other Income |
13.273 |
8.223 |
0.000 |
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Total Income |
8747.844 |
6784.893 |
7585.200 |
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Profit/(Loss) Before Tax |
906.117 |
289.080 |
329.700 |
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Provision for Taxation |
77.100 |
21.033 |
19.500 |
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Profit/(Loss) After Tax |
829.017 |
310.113 |
310.200 |
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Earnings in Foreign Currency : |
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Export Earnings |
6210.136 |
5200.432 |
0.000 |
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Other Earnings |
10.710 |
14.030 |
0.000 |
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Total Earnings |
6220.846 |
5214.462 |
5315.430 |
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Imports : |
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Raw Materials |
2133.873 |
2363.483 |
-- |
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Stores & Spares |
323.250 |
204.308 |
-- |
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Capital Goods |
129.875 |
271.573 |
-- |
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Total Imports |
2586.998 |
2839.364 |
2575.623 |
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Expenditures : |
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Cost of Goods Sold |
3452.651 |
2956.255 |
0.000 |
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Manufacturing Expenses |
2689.187 |
2197.539 |
0.000 |
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Interest |
870.132 |
723.100 |
0.000 |
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Depreciation & Amortization |
829.757 |
618.919 |
0.000 |
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Other Expenditure |
0.000 |
0.000 |
7255.500 |
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Total Expenditure |
7841.727 |
6495.813 |
7255.500 |
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SUMMARISED
RESULTS
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PARTICULARS |
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31.03.2007 [Full Year] |
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Sales Turnover |
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9341.800 |
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Other Income |
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|
15.600 |
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Total Income |
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9357.400 |
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Total Expenditure |
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6443.700 |
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Operating Profit |
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2913.700 |
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Interest |
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|
983.100 |
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Gross Profit |
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|
1930.600 |
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Depreciation |
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|
824.700 |
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Tax |
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|
16.600 |
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Reported PAT |
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|
966.300 |
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Dividend (%) |
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|
300.000 |
KEY RATIOS
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PARTICULARS |
31.03.2006 |
31.03.2005 |
31.03.2004 |
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Debt Equity Ratio |
1.60 |
1.96 |
1.65 |
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Long Term Debt
Equity Ratio |
1.10 |
1.22 |
0.99 |
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Current Ratio |
1.19 |
0.97 |
0.94 |
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TURNOVER RATIOS |
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Fixed Assets |
0.79 |
0.72 |
0.84 |
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Inventory |
2.14 |
2.06 |
2.66 |
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Debtors |
3.38 |
3.96 |
6.05 |
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Interest Cover
Ratio |
2.04 |
1.40 |
1.54 |
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Operating Profit
Margin (%) |
29.32 |
23.66 |
21.09 |
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Profit Before
Interest and Tax Margin (%) |
19.98 |
14.68 |
13.13 |
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Cash Profit
Margin (%) |
18.66 |
13.48 |
12.32 |
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Adjusted Net
Profit Margin (%) |
9.33 |
4.50 |
4.35 |
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Return on Capital
Employed (%) |
10.86 |
7.68 |
8.60 |
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Return on Net
Worth (%) |
13.20 |
6.97 |
7.56 |
STOCK PRICES
|
Face Value |
Rs.10.00 |
|
High |
Rs.251.80 |
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Low |
Rs.247.05 |
LOCAL AGENCY FURTHER INFORMATION
HISTORY
The company was incorporated on 1st July 1992 at Chennai in Tamil Nadu having Company Registration Number 22994. The company obtained Certificate of Commencement of Business on October 15, 1992
Subject was promoted by Mr. Kailasam Raghavendra Rao in 1992 as 100% Export Oriented Unit for manufacture of antibiotics like oral cephalosporins & cephalexin.
In 1994-95, it introduced oral products, cephtadrine. The company expanded capacity to 300 tons / annum and set up a sterile cephalosporin unit in 1995-96. Over the years the company expanded the range of sterile cepholosporins and increased the capacity to 700 tons / annum.
In 1998-99, the company diversified into formulations by setting up a separate division by the name of Orchid Healthcare. Once again in FY2000 the company diversified into neutraceuticals and set up separate company Orchid Nutricare.
In December 1999, the company issued 10653192 equity shares
on private placement basis to foreign companies incorporated in
In March 2001, The Foreign Investment Promotion Board
declared a proposal of the company to issue $ 30 millions worth Foreign
Currency Convertible Bonds (FCCBs) through private placement to International
Finance Corporation (IFC),
Orchid Nutricare was established in
During the year 2001, a separate exclusive plant for
manufacturing of nutraceutical formulations was set up in Alathur with a
capacity to produce 100 million tablets per annum. The
The company has established 50:50 joint venture in the
The company is taking initiatives to establish a
manufacturing and marketing joint venture in
Its’ products range includes :-
Ř
Oral
Cepholosporin :
Cephalexin
Cephradine
Cefuroxime Axetil
Cefixime
Ř
Sterile
Cepholosporin :
Ceftriaxone
Cefotaxime
Ceftazidime
Cefazolin
Cephradine
Cefoperazone
Cefuroxime
Ceftiofur
Ř
Others
Sildenafil Citrate
Lansoprazole
It is in trade terms with :-
Ř Abasi Engineering Works
Ř Ag Filters
Ř Arvind Pipes & Fittings Industries
Ř Aditya Better Containers Private Limited
Ř Anant Company
Ř Atoz Pharmaceuticals Private Limited
Ř Ammonia Marketing Company
Ř B. K. Equipments Private Limited
Ř Cee Kay Electricals
Ř Biotrans Pharmaceuticals (Private) Limited
Ř D. Parikh Engineering Works
Ř Dr. Hedgewar Rugnalaya
Ř Eltech Engineers Madras Private Limited
Ř Grand Polycoats Company Private Limited
Ř Hyderabad Ammonia & Chemicals Private Limited
Ř Hi-Fab Engineers Private Limited
Ř GP Fitwell Systems Private Limited
Ř Elder Instruments Private Limited
Ř Industrial Fabrics (Chennnai)
Ř Jasmine Art Printers Private Limited
Ř Corosynath Services Private Limited
Ř Mayura Analytical Private Limited
Ř Mysore Ammonia Private Limited
Ř Inject ampoules Private Limited
Ř Jay Dheep Techno Enterprises Private Limited
Ř Joseph Leslie & Company
Ř Maral Labs
Ř
Millipore (
Ř N. K. Joshi & Company
Ř Parishram Engineering Works
Ř Praktan Industries
Ř Prafab Engineers Private Limited
Ř R. Stahl (Private) Limited
Ř Ramsons Garment Finishing Equipment
Ř Rockwin Flowmeter India Private Limited
Ř Safex Fire Services Limited
Ř Southern Gasket Products
Ř Supreme Chemiplast Piping Private Limited
Ř Trans Electris
Ř Uniflow
Ř Up-Datar Services
Ř Atra Pharmaceuticals Limited
Ř Ceekay Electricals
Ř Eltech Engineers Madras Private Limited
Ř Hemson Private Limited
Ř Mihir Engineers Limited
Ř Manali Lubricants Private Limited
Ř R P Products
Ř Futura Electronics Private Limited
The company’s fixed assets of important value include freehold land & site development, leasehold land, buildings, plant & machinery, factory equipment, laboratory equipment, office equipment, furniture & fittings and vehicles.
Performance:
During the year under review the Company achieved a turnover and
operating income of Rs.8887.700 Millions
compared to Rs.6892.900 Millions in the previous fiscal year 2004-05,
registering an increase of 29%. Gross profit before interest, depreciation and
taxes in 2005-06 was substantially higher at Rs.2606.000 Millions compared to
Rs.1631.100 Millions in the previous fiscal.
After providing for interest of Rs.870.100 Millions (Rs.723.100 Millions
previous fiscal) and depreciation of Rs.829.800 Millions (Rs.618.900 Millions
previous fiscal), the profit before tax of the Company was Rs.906.100 Millions
as against the previous year's profit before tax of Rs.289.100 Millions. Net
profit after tax stood at Rs.829.000 Millions, as against Rs.310.100 Millions
in the previous fiscal, registering an increase of 167%.
During the year under review, the Company scaled new heights in revenue
and profitability. The buoyancy in performance was triggered to a major extent
by the successful entry of the Company into the
Active Pharmaceutical Ingredients
(API) Business:
During the fiscal year under review, Orchid continued to maintain its
strong position in the global cephalosporin markets. The Company has also been
able to garner a major business opportunity in US for a lyophilized product
based on its unique US FDA approved supply position. The net sale of all bulk
actives during the year 2005-06 was Rs.4990.000 Millions compared to
Rs.5590.000 Millions in 2004-05.
Formulations Business:
The turnover of the formulations business was Rs.3230.000 Millions
during the fiscal, compared to Rs.790.000 Millions last fiscal. The higher
performance trajectory of the formulations business has been propelled by their
entry into the
The domestic formulations business, which decelerated over the last few
quarters of fiscal 2004-05 due to trade resistance and VAT, started recouping.
The Company has been working on diversified growth opportunities in four
consolidated therapeutic areas to reinforce growth. The performance of the
antibiotics division in specific has shown a notable improvement during the year
2005-06.
Marketing
Alliances:
During the year under review, the Company entered into an exclusive
distribution alliance with Mayne Pharma, the injectable specialty
pharmaceuticals Company of the Mayne Group Limited (Mayne) for marketing
Orchid's select life-saving injectable antibiotic formulations in identified
regulated markets. This alliance will cover the
Under this agreement, Orchid will develop and manufacture a range of
injectable antibiotic formulations in specific dosage forms and strengths for
distribution and marketing by Mayne. These products have a current market size
of over USD 1 billion in the selected markets.
Orchid has thus six major exclusive marketing and distribution alliances
with global generic majors Apotex, Par, Actavis, Stada, IVX and Mayne. These
cover 21 antibiotic and 20 non-antibiotic products and represent a consolidated
current annual retail market opportunity of over USD 33 billion. Orchid
anticipates a step-function increase in revenues from these alliances targeted
at the regulated markets resulting in enhanced margins and profitability going
forward.
Press Releases
Par Pharmaceutical Announces Strategic
SPRING VALLEY, N.Y., May 26 /PRNewswire/ -- Par
Pharmaceutical, Inc., the principal subsidiary of Pharmaceutical
Resources, Inc.
Today announced that it has entered into an agreement with
Orchid Chemicals & Pharmaceuticals Limited., based in
"They are pleased to have the opportunity to collaborate with Orchid," said Scott Tarriff, president and chief executive officer. "This alliance will provide Par entry into a therapeutic category where they do not currently have a presence. Orchid represents an ideal partner to help us broaden their product line. They are a fully-integrated pharmaceutical company, with capabilities in areas ranging from active pharmaceutical ingredients to final dosage forms."
"This marketing alliance represents a landmark agreement for their company," said Raghavendra Rao, managing director of Orchid. "Par's marketing capabilities and regulatory expertise are a perfect complement to their strengths in product development and manufacturing."
Under the terms of the agreement, Orchid will be responsible
for the development and manufacture of all products. Par will provide
regulatory affairs support and submit each Abbreviated New Drug Application
(ANDA) to the U.S. Food and Drug Administration (FDA) on behalf of Orchid. Par
will have exclusive rights to market, sell and distribute the products in the
Orchid Chemicals & Pharmaceuticals Limited. is a leading
pharmaceutical company headquartered in
Pharmaceutical Resources, Inc., a holding company, develops, manufactures and markets generic pharmaceuticals through its wholly owned subsidiary, Par Pharmaceutical. The company is also developing a line of proprietary specialty pharmaceuticals and expects to market the first of these in 2005. Through its FineTech subsidiary, PRX develops and utilizes synthetic chemical processes to design and develop intermediate ingredients used in the production of finished products for the pharmaceutical industry. PRX currently manufactures and distributes more than 170 products representing various dosage strengths of 73 drugs. For press release and other company information, visit http://www.parpharm.com/
Certain statements in this press release may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. To the extent any statements made in this news release contain information that is not historical, these statements are essentially forward-looking and are subject to risks and uncertainties, including the anticipated closing of the Kali acquisition, difficulty of predicting FDA filings and approvals, acceptance and demand for new pharmaceutical products, the impact of competitive products and pricing, new product development and launch, reliance on key strategic alliances, uncertainty of patent litigation filed against us, availability of raw materials, the regulatory environment, fluctuations in operating results and other risks and uncertainties detailed from time to time in the company's filings with the Securities and Exchange Commission, such as the company's Form 10-K, Form 10-Q, and Form 8-K reports.
To
launch a range of antibiotics
Chennai - For Orchid Chemicals and Pharmaceuticals Ltd the year 2007-08 will be a memorable one, a year in which it will step into the European markets. Coming "within a week", is an announcement of a tie-up with a "large European pharma company" for marketing Orchid's products in the continent, according to Orchid's Managing Director, Mr K. Raghavendra Rao.
In 2007-08, the company will launch a range of
Cephalosporins (a family of antibiotics). These products were introduced in the
Now, the company is going through the process of securing European approvals for launch there, which Mr Rao believes is a matter of formality. The European market for these antibiotics is worth $700 million (Rs 3,150 crore).
In addition to these Orchid will launch Pencillin-based
product, Tazobactum-Piperacillin, in
In addition to the entry into Europe, Orchid will also
launch five non-antibiotic formulations and a Cephalasporin-based
anti-infective, Cefdirin, in the
Diabetes
drug delay
The launch of the new anti-diabetes drug will be further delayed. The Phase-I I A trials (testing the drug on affected humans) have not thrown up conclusive data about the working of the drug. "We could not draw any statistically significant conclusions from the data," Mr Rao said, adding that the only option was to do an extended trial (on more humans and higher dosage for longer period). The results of these trials would come out in June.
It was first said that the drug could be launched in January 2006, but the timeline changed to September. It now appears that the drug would not be in the market at least for a year from now.
Growth zone ahead
Orchid Chemicals and Pharmaceuticals — a leading pharma
company making anti-infectives — has shifted focus from bulk drug manufacturing
to higher-margin formulations over the years. Its foray into regulated markets
of Europe and the
Its strong capabilities in niche segments and its fully integrated status make it one of the lowest cost players in the global Cephalosporins market; its stock is worth a second look.
Business: Orchid introduced its first drug in the
It has filed 36 Abbreviated New Drug Applications (ANDAs)
with the US Food and Drug Administration (FDA). While Orchid supplies the
finished dosage formulations, its
Orchid focuses on the antibiotic segment, estimated at $6
billion in the
Price erosion for antibiotic generic drugs is limited, as there are few players in that segment. Copies of antibiotic drugs are typically launched at 20% of the innovator’s price, against 2-5% for the rest of the generic market. For injectible antibiotics, price erosion is even lower. These drugs can be launched at 30% of the innovator’s price.
Tazobactum-Piperacillin (brand name Zosyn), which Orchid is
likely to launch in the
But Orchid’s ANDA for Tazobactum-Piperacillin is still pending
for approval, as Wyeth, the innovator for this product, has withdrawn its drug
from the market. The US FDA is likely to shortly rule on this case.
Orchid recently made inroads into the European generic market. Last month, it entered into a licensing and distribution agreement with Actavis to market nine Cephalosporin generic formulations in 37 European countries. With a potential market size of $700 million, these products could generate significant revenues in ’07-08.
The management expects revenues from regulated markets to
double in FY08. However, semi-regulated markets (
Sales in semi-regulated markets represent around 45% of the
company’s revenues, while the
Financials: Net sales were marginally up at Rs 2387.000 millions in the quarter ended December 31, ’06, from Rs 2376.000 millions in the same quarter last year; net profit fell 2.2% to Rs 283. 000 millions. This decline is from a relatively high base.
Orchid witnessed strong growth in the quarter ended December
31, ’05 following the launch of two new drugs in the
Valuations: At the current market price of Rs 261, the stock
is quoting at a P/E of 19.4, which is lower than that of its peers. The stock
looks attractive over the long term. As the company increases its focus on
higher-margin businesses and revenues from
Growth in the short term will, to some extent, depend on the
company’s ability to launch its generic version of Zosyn in the
AS PER WEB DETAILS
A decade of growth
Orchid Chemicals & Pharmaceuticals Limited. is an
integrated pharmaceutical major (headquartered in
A first generation enterprise founded in 1992 by K Raghavendra Rao, Orchid has been recognised as the only company in the Indian Pharmaceutical industry to have recorded remarkable growth in a decade of operations.
Starting with a mature cephalosporin bulk drug, Cephalexin in 1994, Orchid quickly achieved a core competence and global standing in the technologically complex cephalosporin field. Orchid has since its inception grown ten-fold in physical output terms and fifteen-fold in value terms signifying an exciting growth journey.
Today, with exports spanning more than 75 countries, Orchid
is the recognised as the largest manufacturer-exporter of cephalosporin bulk
actives in
Orchid's world-class manufacturing facilities for bulk
actives, including the latest US FDA approved blocks, are located in Alathur, a
little away from Chennai. Orchid also has dedicated manufacturing facilities for
nutraceutical bulk active ingredients and cephalosporin and non-cephalosporin
formulations in Alathur. A State-of-the-art US FDA compliant bulk actives
manufacturing facility is also located at
Orchid's R&D facility located at Sholinganallur in Chennai is considered among the most advanced and state-of-the-art centre for applied research and analytical development. The centre works on several areas of research including process research, pharma research, new drug discovery, novel drug delivery systems and biotech research. Dedicated infrastructure and labs have been created for each of these research streams.
Orchid has also commissioned a pre-clinical toxicology and pharmacology centre, located in the R&D campus to aid pre-clinical trials.
Orchid's foray into the regulated markets is well supported by the commissioning of additional US FDA compliant manufacturing blocks for sterile and non-sterile APIs and a state-of-the-art mammoth US FDA complaint formulations manufacturing facility located at Irungattukottai, near Chennai for oral and sterile cephalosporin formulations.
Orchid's regulatory filings and approvals roadmap has seen
little parallel in the industry. Orchid has over the last couple of years made
significant progress in its regulatory journey. Several key bulk &
formulation facilities have been inspected/approved by international regulatory
agencies. Orchid has received two approvals from the US FDA for its API
products (Cephalexin and sterile product, Cefazolin). In addition, several key
API products have also been granted the Certificates of Suitability (CoS) from
the European Directorate for the Quality of Medicines (EDQM). The cephalosporin
API facilities and non-cephalosporin formulation facilities at Alathur have
also been approved by the TGA,
Orchid is one of the few pharmaceutical companies of its size and scale to have received the ISO 9001:2000, ISO 14001 and OHSAS 18001 certifications for its world-class quality, environmental management systems and Operational Health & Safety systems respectively.
Orchid has undertaken several initiatives to position itself strategically in
the evolving global pharmaceutical paradigm. From a core competence in
manufacture of cephalosporin bulk drugs, Orchid has evolved into a composite
end-to-end robust pharmaceutical corporation that has distinctly moved up the value
chain.
Joint ventures
Orchid entered into a research joint venture with Bexel Biotechnology in the
Considering the potential of the Chinese market, Orchid entered into a 50:50
manufacturing and marketing joint venture with the North China Pharmaceutical
Corporation (NCPC), the largest pharmaceutical group in
Orchid established a 50:50 applied research joint venture (Biotechnological
Chemical Development Limited.) with IBPP for peptide drugs and niche products
in
CMT REPORT (Corruption, Money Laundering & Terrorism]
The Public Notice information has been collected from various sources
including but not limited to: The Courts,
1] INFORMATION ON
DESIGNATED PARTY
No exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets were seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court Declaration :
No records exist to suggest that subject is
or was the subject of any formal or informal allegations, prosecutions or other
official proceeding for making any prohibited payments or other improper
payments to government officials for engaging in prohibited transactions or
with designated parties.
3] Asset Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record on Financial
Crime :
Charges or conviction
registered against subject: None
5] Records on Violation of
Anti-Corruption Laws :
Charges or
investigation registered against subject: None
6] Records on Int’l
Anti-Money Laundering Laws/Standards :
Charges or
investigation registered against subject: None
7] Criminal Records
No
available information exist that suggest that subject or any of its principals have
been formally charged or convicted by a competent governmental authority for
any financial crime or under any formal investigation by a competent government
authority for any violation of anti-corruption laws or international anti-money
laundering laws or standard.
8] Affiliation with
Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government official
or a family member or close business associate of a Government official.
9] Compensation Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar
services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE GOVERNANCE
MIRA INFORM as part of its Due Diligence do provide comments on
Corporate Governance to identify management and governance. These factors often
have been predictive and in some cases have created vulnerabilities to credit
deterioration.
Our Governance Assessment focuses principally on the interactions
between a company’s management, its Board of Directors, Shareholders and other
financial stakeholders.
CONTRAVENTION
Subject is not known to have contravened any existing local laws,
regulations or policies that prohibit, restrict or otherwise affect the terms
and conditions that could be included in the agreement with the subject.
FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.40.82 |
|
|
1 |
Rs.81.18 |
|
Euro |
1 |
Rs.54.79 |
SCORE & RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
7 |
|
PAID-UP CAPITAL |
1~10 |
7 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
8 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
8 |
|
--LEVERAGE |
1~10 |
7 |
|
--RESERVES |
1~10 |
8 |
|
--CREDIT LINES |
1~10 |
8 |
|
--MARGINS |
-5~5 |
|
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
YES |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
76 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a composite
of weighted scores obtained from each of the major sections of this report. The
assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable & favourable factors carry similar weight in credit
consideration. Capability to overcome financial difficulties seems comparatively
below average/normal. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
NR |
In view of the lack of information, we have no basis upon which to
recommend credit dealings |
No Rating |
|