Orchid Pharma Ltd on Tuesday announced that it has entered into a technology transfer agreement with a leading multinational biotechnology company for its fermentation based ‘7ACA project’ under the production linked incentive (PLI) scheme.
The Chennai-based pharmaceutical manufacturer, however, did not disclose the name of the biotechnology firm or further details of the agreement.
In July last year, Orchid Pharma announced that its wholly-owned subsidiary, Orchid Bio Pharma, has received approval to manufacture ‘7-ACA’ product with a committed capacity of 1,000 tonne per annum. 7-ACA (7-aminocephalosporanic acid) is the core chemical structure for the synthesis of cephalosporin antibiotics and intermediates.
Subsequently, Orchid Bio Pharma entered into an MoU with an overseas technology provider for in-licensing of 7ACA. The company also announced an investment of ₹600 crore in capex towards its upcoming new manufacturing plant in Jammu set up under PLI scheme.
Backward integration
Orchid Pharma MD Manish Dhanuka had earlier said the 7ACA project will help in backward integration of key raw materials and reduce dependency on sourcing from China, which in turn will improve overall business margins.
Last week, Orchid Pharma raised ₹400 crore through qualified institutions placement of its equity shares to marquee institutional investors such as Massachusetts Institute of Technology (MIT), Societe Generale. The fundraising pushed the stock to its 52-week high of ₹524 on NSE.
Shares of Orchid Pharma ended flat on Tuesday at ₹503 on the NSE.