The Hindu Business Line : Canere, Sarabhai will help Nicholas Piramal consolidate

EVEN as two more "customised manufacturing" contracts are expected to crystallise by September 2004, pharma-major Nicholas Piramal India Ltd (NPIL) is closer to integrating it's plans and facilities towards supporting future contracts.

The company on Friday informed the BSE that two of its schemes of amalgamation — for merger of Sarabhai Piramal Pharmaceuticals and Canere Actives, respectively — with NPIL had been sanctioned by the Bombay High Court.

Elaborating on what the mergers would bring to the table for NPIL, analysts told Business Line that the merger of Sarabhai Piramal Pharmaceuticals Ltd (SSPL) would help NPIL to expand it's formulations (finished forms of medicines) business.

"SSPL has some very strong brands and an 800-strong workforce. The merger is expected to considerably improve the bottom-line of NPIL," they said.

Similarly, the merger of Canere Actives and Fine Chemicals Pvt Ltd with NPIL will help the latter in the bulk drugs category. Canere Actives has an Active Pharmaceutical Ingredients (API - the ingredients that go into making a medicine) plant in Hyderabad. And this plant is expected to get clearance from the US regulatory authorities this year, the analyst said.

"The company's management had indicated that about four contract manufacturing deals were being explored and two were likely to be formalised by September this year. Three of the deals are being discussed with top 20 global innovator companies and one with a smaller global firm. NPIL is well placed to undertake more on-patent custom manufacturing contracts with the merger of these two companies," analysts said. Only recently, NPIL had announced plans to set up an office in the US to bring in more business for the company.

In January 2003, NPIL had amalgamated the API business of Global Bulk Drugs with itself, analysts said. They added: "The manufacturing facility that came with the merger of this company has a blanket USFDA approval. If Canere's Hyderabad plant - located in the space adjoining Global Bulk Drugs' facility - gets USFDA regulatory approval, then NPIL would be able to leverage both plants seamlessly to support future contracts."

In December 2003, NPIL had entered into an exclusive custom manufacturing deal with eye-care products company AMO for global markets including the US, Europe and Japan.

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