The Hindu Business Line : Shasun Chem may split research, manufacturing operations

Chennai, October 10 The management of the Chennai-based Shasun Chemicals and Drugs Ltd is considering splitting the company into two entities — one for manufacturing and the other for research — own and contract, it is learnt.

The Rs 793-crore (consolidated) company has two plants for manufacturing bulk drugs and formulations, at Pondicherry and Cuddalore. Shasun is a producer of ibuprofen, nizatidine and ranatidine.

It has a research unit — Shasun Research Centre — at Kelambakkam, near Chennai.

In 2006, Shasun took over Rhodia Pharma of the UK through its wholly-owned subsidiary, Shasun Pharma Solutions Ltd. Apart from contract manufacturing facilities, Rhodia Pharma has 17 molecules under phase-II and phase-III clinical trials.

It is understood that the plan is to put Shasun Research Centre and the UK operations under another corporate entity.

Asked about this, a senior official of the company said he did not want to comment. He said that there were “many proposals to take the company forward” which could be discussed by Shasun’s board at its meeting on October 16.

Sources point out that this is not for the first time that a pharmaceutical company is separating the manufacturing and research operations. Companies such as Sun Pharma and Dr Reddy’s have done so. This is because manufacturing and research operations are of varied risk profiles. Putting them under separate companies will help derisk manufacturing and secure funding for research—a high risk, high reward activity.

More Stories on : Restructuring | Pharmaceuticals | Research & Development

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