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| JB Chemicals and Pharmaceuticals, one of India's aspiring mid-cap pharma companies, posted net sales of Rs 63.11 crore for the first quarter ended June 30, 2003, a gain of 2.31 per cent over the same period last year, and a net profit of Rs 9.25 crore, up 9 per cent. The scrip is trading at Rs 279.70, a P/E of 9.2x.
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| JB Chemicals and Pharmaceuticals' June-quarter performance has been flat (like many other mid-cap pharma companies). Why?
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| The industry as such has not performed too well. Pharma companies have put in more or less flat or negative performance during the quarter. The industry has grown by hardly 4 per cent in the quarter.
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| Historically, our second- and third-quarter performances have been better. Our EPS for FY03 was Rs 30, which is very good amongst the top companies and MNCs.
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| We have an excellent debt-equity ratio. Whatever little debt we have is mainly because of our public deposits.
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| We are taking deposits more from the social angle rather than by way of borrowings. We don't want our fixed depositors like pensioners and widows to suffer.
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| We took money from them when we needed and we believe it is our duty to continue to service them.
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| How are you planning to take on challenges post-2005?
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| We are geared to face challenges post-2005. We have already taken necessary action to strengthen our R&D and exports.
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| Further, we have signed an alliance with US research-based company, Spectrum, and formed a venture christened NeoJB LLC. We would provide manufacturing skills while Spectrum would manage the regulatory filings and marketing functions in the US.
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| Spectrum has an agreement with a Germany-based company which will be spending $80 million to carry out third-phase trials for a cancer product. When it comes to the fourth stage, we will probably get in because, in India, the costs are lower.
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| We also have an arrangement with Arrow group of Canada to market our products in Canada and Latin America.
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| Which are the main pharmaceutical segments you are looking at?
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| Apart from our focus on large therapeutic segments like anti-amoebicides, anti-ulcerants, cardio-vasculars, anti-infectives and anti-inflammatory segments, we are also concentrating on the anti-diabetics segment, which has the highest growth potential in the country.
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| Besides we are already working on new products in non-steroidal anti-inflammatory drugs (NSAIDs), anti-bacterials and central nervous system (CNS) segments.
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| In fact, we have already launched two new products - Motiza and Rhino - and are planning to launch about five new products soon.
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| Could you tell us about the research and development (R&D) centre you are planning to set up?
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| We are going to start a new R&D centre in Pune. The project will be completed in three years and is estimated to cost about Rs 40 crore. Post-2005, the only key to success will be innovation.
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| The state-of-the-art centre will help us reinforce our R&D activities. We have named Dr Rajen Shah, who has worked with MNCs for over 15 years, director for the project.
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There is a perception that your company is overdependent (80 per cent) on Russia and CIS markets as far as exports are concerned. Isn
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