Orchid Chem to launch 2 more antibiotics in US

Orchid Chemicals and Pharmaceuticals expects to launch two more antibiotics in the US this financial year, taking the size of its product basket there to five.

These five products are expected to boost the company's sales to touch $30 million (about Rs 130 crore) this year, said K Raghavendra Rao, the company's managing director.

Cefprozil, a cephalosporin, is to lose its patent protection in the US in December 2005. Orchid expects to receive approvals from the US regulator for two forms of the product (abbreviated new drug applications) to launch its generic version when the patent expires, said Rao.

In addition to Cefprozil, Orchid expects to launch the first generic version in the US of the veterinary product Ceftiofur this year.

Orchid does not expect more than three competitors in Cefprozil generics space immediately, added Rao. Ranbaxy Labs, Sandoz and Teva are likely to be the other companies in the fray.

Limited competition is key to Orchid's plan to enter the market for generics in the US. Rao said he did not expect more than five competitors in the 15 cephalosporin products where the company has distribution deals in place for the US.

Limited competition would translate into better realisations for the companies.

Though Orchid also has distribution deals for another 20 non-cephalosporin products in the US and Europe, the company is relatively stronger in the 15 cephalosporins that it plans to sell in the US.

The company started operations in the early 1990s by making cephalosporin bulk drugs. In cephalosporins, it is in a better position to work its way through a maze of process patents that often check generic competitors even after a product loses its patent, explained Rao.

For instance, even though the veterinary product Ceftiofur lost its patent toward the end of 2001, patents on processes and an intermediate have kept out generic competitors. Orchid expects to be the first generic company here.

Orchid has filed 19 ANDAs. So far, the company has received seven approvals that cover three products: Cephalexin, Cefazolin and Ceftriaxone.

Orchid plans to raise $100 million through global depository receipts (GDRs), whose pricing is to be decided shortly. The bulk of the issue will used to extinguish its high cost debt "" Orchid's debt-equity ratio is more than 2:1, one of the highest in the industry.

The balance GDR proceeds would used to strengthen its position in generics , among other things, said Rao.