SMS Pharma to focus on off-patent drugs

The Hyderabad-based active pharmaceutical ingredient (API) and intermediate manufacturer SMS Pharmaceuticals has set its eyes on molecules going off-patent to boost revenues through contract manufacturing and direct exports.

SMS, among the largest manufacturers in the world for antibiotic Ranitidine HCL and its intermediates with a capacity of 1,440 MTPA, is planning to set up its second USFDA plant at Visakhapatanam to manufacture drugs going off-patent. The company is raising around Rs 98 crore from a public issue to set up the plant at an investment of Rs 114 crore. The company entered the capital markets on February 5 and the issue has been subscribed 1.5 times, said TVVSN Murthy, vice-chairman and managing director, SMS Pharmaceuticals.

"We are planning to focus on manufacturing drugs going off-patent in near future, which will allow us to boost our revenues with better realisations. Our existing product range includes eight drugs that are going off-patent and another ten new generation drugs. We have identified 20 drugs in the category of anti-migraine, anti-cancer, anti-ulcer, anti-viral etc for manufacturing in the future. Many of these formulations are going off-patent in near future," said Ramesh Babu Potluri, chairman & managing director of SMS Pharmaceuticals.

The proposed products include APIs of anti-migraine triptan drug, anti-cancer drug Geftinib, anti-nausea drug Ondanestron, anti-ulcer drugs Sertraline and Meloxicam, anti-Alzheimer drug Galantamine and anti-asthma drug Montelukast. The new plant will mainly cater to drugs going off-patent, while a part of the plant will be used for manufacturing the last stage process for Ranitidine.

The company already makes new generation APIs of anti-migraine drug Sumatriptan Succinate and Almotriptan Malate, blood pressure drugs such as Perindopril Erubamine and Imidaprile, anti-cancer drugs such as Gemcitibine HCL, Capecitabine, and Imatinib Mesilate and Sidenafil Citrate .

He said the company has filed drug master file (DMF) with USFDA, Canada and EU for Sumatriptan Succinate and GSK's anti-migraine drug Imitrex, going off-patent in the US in 2009. Imitrex's EU patent expired recently and SMS is selling it in non-regulated and regulated markets. The company has entered into a supply deal with a company in Europe for the product. The company also has a product development agreement with Sochinaz SA in which SMS has developed and validated all analytical methods and process technology for Trandolapril. APIs are also supplied to Beximco of Bangladesh. The company has also filed 28 DMFs for four products in various countries. It supplies products to major companies such as Ranbaxy, Cadila, Orchievie Pharma, Dabur Pharma, Torrent, Neuland Laboratories etc.

SMS recorded a turnover of Rs 133 crore in FY06 and is operating through three manufacturing units, one pilot plant and one basic research facility in and around Hyderabad.

Murthy said the company has 65 per cent of the market share in the world for Ranitidine. Its innovation for reducing the number of processes involved in the manufacturing of Ranitidine from 7 stages to 4 has helped bring down its price to Rs 400 per kg from around Rs 1,200.