Bangalore-headquartered pharmaceutical company Strides Arcolab has entered into an agreement with Bio-XCell of Malaysia to set up a facility in Malaysia to manufacture biopharmaceuticals and sterile injectables. Bio-XCell is a biotechnology park in Iskander Malaysia, which provides an ecosystem for industrial and health manufacturing and R&D. The project is jointly developed by Malaysian Biotechnology Corp and UEM Land Holdings Ltd.
As per the agreement, Bio-XCell will build the facility as per design requirements of the Indian pharma company and will lease it to Strides on a long-term basis. The lease rentals are applicable from the date of commercialisation which supports the biotech strategy of Strides where there is a long gestation period from development to commercialisation, the company said in a statement.
“Malaysia provides us with a strategic location to expand our manufacturing operations. The attractive financial incentives by the Malaysian government and the presence of a pharma eco-system were the catalysts to our decision,” Adam Levitt, chief executive officer, Americas of Strides Arcolab, said. Referring to this matter, T S Rangan, group chief financial officer, said it would take two-three years to set up the new facility. “It’s premature to talk about investment and capacity at this point of time as we have just entered into an agreement for this facility,” he said. He also said that cost advantage part was not estimated yet by the company.
The agreement, which has been signed by specialty subsidiary of Strides-Agila Specialties, is expected to increase manufactuing capacity of the pharma company. After commercialisation of Malaysian facility, Strides will have nine specialty manufacturing facilities under Strides across the world.
Malaysia has emerged as a favourable spot for pharma and biotechnology companies globally to set up manufacturing and R&D units on the back of attractive tax incentives and other concessions. In addition to Strides, Indian biotech company, Biocon; Metabolic Explorer from France and Glycos Biotechnologies of US are some of the companies which will set up manufacturing units in the Bio-XCell Ecosystem.
Earlier, Biocon has said that would invest around $161 million (Rs 720 crore) in Malaysia to set up its new manufacturing unit by 2014 to ramp up capacity.
Strides Arcolab has posted a 4.5 per cent rise in its net profit to Rs 45.08 crore in the first quarter (January-March) of current calender year on the back of sound growth in specialty business. Total revenue of the company rose by 30.34 per cent to Rs 497.31 crore against Rs 351.52 crore in the same period last year.
