Orchid to up Waluj investments

It has already invested Rs 130 crore in the facility, plans additional Rs 100 cr investments

Orchid Chemicals and Pharmaceuticals, which has already put in Rs 130 crore in its Waluj plant near Aurangabad, is investing an additional Rs 100 crore over the next 18 months to implement an ambitious expansion plan.

K Raghavendra Rao, managing director of the company, disclosed that the company was aiming to become a $1 billion firm by 2010, and the Waluj plant is poised to play an important role in achieving this target.

"Currently, we are selling four cephalosporin antibiotics formulations in the US. We are also venturing into new sectors such as penicillin anti-biotics and carbapenems. By 2007-08, Orchid will have a range of 21 cephalosporin products - 14 injectables and 7 oral - in the regulated markets of the US, Europe and Japan. In the non-antibiotics lifestyle drugs category, Orchid will have products for cardiovascular diseases, osteoporosis and diabetes. Presence in the regulated markets with such a broad product range would help us reach the magic figure of $1 billion. The Waluj project will be the base for providing active pharmaceutical ingredients (API) to our formulation plants at Chennai. Next year, the US FDA inspection will be carried out at the Waluj unit," Rao said.

He said that he was satisfied with the company's experience in Aurangabad. "Basically, we have a highly educated staff - employees are graduates and above - so we do not have any problems on the operational level. However, I must add that we find it difficult to get quality manpower in certain niche areas such as manufacturing sterile injectables or quality assurance," Rao pointed out.

Rao said that there would be no sudden spurt in prices of products though India has accepted the product patent regime.

"Nearly 97 per cent of drugs being sold in the country are off-patent. Only 2-3 per cent drugs related to cardiovascular diseases or oncology are patented one. So there is no fear of spiralling prices. We would see the real impact of the new patent regime after 2012, when new drugs with patent validity will come to the market," he said.

Rao regretted that the world market does not have even a single allopathic drug developed by an Indian company. However, he expressed confidence that with changing times, domestic companies would turn their attention to basic research and would be the proud owner of their own patents in near future.

Rao, who has set up a joint venture manufacturing facility in China, believes that the neighbouring giant has some advantages over India.

"Labour force there is disciplined and cheap. Besides, infrastructure (such as roads and airports) is superior and cost of electricity is nearly half of what we are paying. Banking interest rates are low and stable. It does have such drawbacks as less number of US FDA approved plants and lack of communication skills in English," he said.

USFDA approval

Orchid Chemicals & Pharmaceuticals has said it has received USFDA approval for its ANDA (Abbreviated New Drug Application) for cefprozil for oral suspension USP, 125 mg / 5 ml and 250 mg /5 ml.The current US market size for Cefprozil oral suspension is $120 million, the company said.