The Hindu Business Line : ‘Strides Arcolab to launch over 25 products this year’

Bangalore, Mumbai 12 Pharmaceutical company Strides Arcolab Ltd expects new product launches – mainly in the US and Europe – to drive its revenue growth this year, its Vice-Chairman and Chief Executive said.

“We expect to launch more than 25 drugs globally in 2009,” Mr Arun Kumar told Dow Jones in a recent interview.

He didn’t provide any revenue or net profit forecast.

For the year ended December 31, it had reported a 49 per cent increase in revenue from a year ago to Rs 1,136 crore. Net profit was Rs 108 crore.

The company expects to maintain its operating margins at around 18 per cent in 2009, almost the same as last year, he said.

US approval

Strides Arcolab plans to seek regulatory approval in the US for 40 new drugs in 2009, Mr Kumar said.

It already has 51 applications pending with the US Food and Drug Administration and half of them are expected to be approved this year, he added.

Mr Kumar, however, said he doesn’t expect any product approvals from Europe in the first half of the year.

Revenue from product licensing is expected to remain almost at the same level as last year’s Rs 100 crore, he said.

Strides Arcolab – which earns licensing income and a royalty on sales of products that it licenses to other companies - had last year entered into a licensing and drug supply agreement with GlaxoSmithKline Plc).

But that agreement – signed by Strides’ joint venture with South Africa’s Aspen Pharmacare Holdings Ltd – is likely to start contributing significantly to the Indian company’s revenue only from 2011.

No fundraising plans

Strides Arcolab has no fresh fundraising plans, Mr Kumar said. For this year, it has a routine capital expenditure target of Rs 50 crore for upgrading existing capacity, he said without elaborating.

He said the company also has no plans to raise its research and development expenditure. Last year, it had spent about 7 per cent of its global sales on research and development.

Strides Arcolab expects the FDA to inspect the company’s two new Indian plants - to manufacture sterile injectable products such as penicillin and cephalosporin - in the second half of this year, he said.

It has already started filing product applications from these plants and will need the regulator’s clearance before products made there can be sold in the US.

The company has 12 plants globally, of which eight are in India.