SMS Pharma may tie up with Malaysian firm

Company also in talks with Iran and Israel firms.

SMS Pharmaceuticals Ltd, a Hyderabad-based pharmaceutical company, will soon enter into a strategic tie-up with pharma companies from Iran, Israel and Malaysia.

A source close to the company said, "SMS Pharma is in talks with pharma companies from Iran, Israel and Malaysia to set up a model on the lines of its Bangladesh business model." Recently, SMS Pharma had entered into an agreement with Beximco Pharmaceuticals Ltd (BPL), a Bangladesh-based pharma company.

Under the business model agreed between Beximco and SMS Pharma, the intermediaries will be prepared in India and supplied by SMS Pharma to Beximco in Bangladesh. The finished products will be produced by Beximco Pharma in Bangladesh and the profit be shared on 1:1 basis.

Of the three companies, the Malaysian tie-up is immediate on the cards. There is a possibility that the company might work out a tie-up with the Malaysian pharma company soon.

According to the source, even SMS Pharma is keen to enter into such an arrangement as it would increase its market reach as well as bring in high margin.

Besides, it has been agreed that SMS Pharma will provide the technology, training to the personnel and help in installation of a production facility for Beximco in Bangladesh. The financial part would be taken care of the Bangaladesh firm.

The company has also entered into a strategic alliance with Gulf Pharmaceutical Industries. Gulf Pharma has picked up a 5 per cent stake from the promoters of SMS Pharma and would acquire another 4 per cent through the pre-IPO placement. The company expect to touch a turnover of Rs 340 crore by the financial year 2007-08.