The Hindu Business Line : Unichem charts roadmap to move into big league

WHEN Dr P.A. Mody, Chairman and Managing Director of Unichem Laboratories, says "we are in fact running out of capacity", it still does not prepare one for the scale of the Mumbai-based company's growth plans.

In an effort to catapult itself into the pharma big league, the mid-sized pharma company has earmarked about Rs 150 crore towards beefing up its manufacturing facilities over the next two years, besides making inroads into regulated markets like the US.

Setting a scorching pace for its growth, Unichem is looking to step aside from its current strategy of organic growth and is currently scouting around for suitable businesses to acquire.

The company is looking to add at least three more manufacturing facilities over the next couple of years to its four existing manufacturing facilities at Ghaziabad, Goa, Baddi (Himachal Pradesh) and Roha in Maharashtra.

While the first three plants manufacture formulations or the finished form of drugs, the Maharashtra plant makes active pharmaceutical ingredients (API) - the raw materials that go into medicine.

"Backward integration is a key factor in being a generic player, which is why we are looking to acquire one more API plant," said Dr Mody.

Mr B.K. Sharma, Executive Director, hopes to complete the API plant acquisition in the next two months.

Meanwhile, the company expects its Baddi plant to be completed by October this year and be operational by April 1, 2005.

On the anvil is one more plant for finished dosage forms in Baddi, but this is slated for 2006-07.

Unichem is also looking to acquire a business worth Rs 50-100 crore and has informally sounded out the matchmakers in the industry, officials said.

Meanwhile, the company is preparing to file abbreviated new drug applications (ANDAs) in the US by 2004-05, with about three ANDAs being slated for the forthcoming fiscal.

(An ANDA tends to accelerate the approval of chemically equivalent drugs for marketing in the US.)

Having got a foothold in Europe through the UK-based Niche Generics, in which it holds 60 per cent equity, Unichem has filed 12 drug master files (DMFs) in Europe, besides eight DMFs for the bulk ingredient.

(DMFs are submissions of data on a drug to regulatory authorities.)

The company expects exports to increase from the current 12 per cent of sales to about 50 per cent in five-odd years.

With two research and development centres in Mumbai and Bangalore - for biotechnology - the company is fortifying its efforts in therapeutic areas like cardio-vascular, central nervous system (CNS), anti-infectives and pain management, where it already has a presence.

However, it has put research for new chemical entities on the backburner, since it requires deep pockets.

Instead, the company plans to partner with other companies, get into in-licensing arrangements and concentrate on non-patent infringing processes in markets where the patent on a product under a specific brand has expired.

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