The Hindu Business Line : Mangalam Drugs bets on anti-malarial drugs

ANTI-MALARIAL drugs will be the focus for Mumbai-based Mangalam Drugs and Organics Ltd (MDOL), a bulk drugs and chemicals company promoted by the Dhoot family.

The company looks to manufacture new versions of anti-malarial drugs in its effort to establish a national and international footprint, MODL's Director Mr G.M. Dhoot told Business Line. To support its plans in the anti-malarial segment, MODL is set to raise Rs 14 crore from the market.

The company has submitted its offer document to regulatory authorities and expects the public issue to hit the market by late January or early February.

The offer is for 65,00,000 shares of Rs 10 each in the price band of Rs 20-22 each. Post-public offer, promoters will hold about 51 per cent in the company, officials said.

MODL is looking to bring in competitive prices in the anti-malaria segment, through increased volumes and backward integration, Mr Dhoot said. Currently, the price of some ingredients that go into anti-malarial drugs is about $1,000 a kg.

"We identified a few key anti-malarial drugs like artisunate and artemether and decided to expand on the line, to combine the business proposition with social commitment."

MODL has two plants at Vapi in Gujarat and Sangamnerfin Maharashtra. Finance raised from the market will partly be used to expand capacities at these two plants, according to Mr Dhoot.

A pharma industry representative said that MODL could spur some action in the anti-malarial segment if it could bring down prices on the active ingredients to about $500 a kg.

They expect the company to get into the new anti-malarial drugs segment by September this year. Bulk drugs now account for about 35 per cent of MODL's total product portfolio and the company expects to increase this to 55 per cent in a couple of years. However, the company will not get out of the chemicals segment.

MODL supplies its bulk drugs to formulation companies that make the drug in its finished form; this clientele includes Bayer, Nicholas Piramal, Intas, and Nestor.

MODL is also a key producer of pain and fever drug, Nimesulide, "a distant cousin" of the Cox II inhibitor family of drugs. This class of drugs was at the centre of a global controversy regarding safety. Mr Dhoot, however, said that Nimesulide was safe for use in adults in 100 mg strengths and MODL was even exporting it. Exports account for 12 per cent of MODL's Rs 80-crore sales turnover for March 31, 2004.

The company exports to Europe, though plans for the US are a couple of years away.

MODL clocked Rs 45 crore in the first six months of the current fiscal and on that basis, expects to close March 2005 at Rs 90 crore, company officials said.

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