Growth pills

Mumbai, July 18: Encouraged by a 56 per cent surge in its first quarter net profit, Orchid Chemicals & Pharmaceuticals Ltd (Orchid) announced today bonus shares for its shareholders. The shareholders will get one share for every two shares held.

For the first quarter ended June 30, Orchid clocked a net profit Rs 7.33 crore compared with Rs 4.69 crore in the year-ago period.

Presenting the unaudited quarterly numbers, Orchid managing director Raghavendra Rao said the company considered it appropriate to reward the shareholders with a 1:2 bonus issue. The company has entered into a new growth area of regulated generic drugs, he added.

During the first three months of its current accounting year, the Mumbai-based pharmaceutical company has achieved a sales turnover of Rs 170.26 crore, up from Rs 173.86 crore recorded in the corresponding period a year ago.

Rao said the company has also been able to improve its margins qualitatively along with revenue following increased focus on the market for regulated generic drugs.

“With the launch of high-value generic formulations in the US, we expect our revenues and profits to post robust growth once the patented products go off-patent beginning the current fiscal,” Rao said. This year, two premium products Ceftriaxone injections and Cefproxil tablets are going off-patent and Orchid will launch its version of those products in the US.

While these two products offer significant opportunity for Orchid, the company will also gain from the launch of its USFDA-approved generic products in the US market.

Orchid is also eyeing the non-antibiotic segment in which the patents on drugs for CNS, CVS, diabetes and osteoporosis will be removed progressively from 2008.

The company has also lined up a $100-million GDR issue, the proceeds of which will be utilised partly for debt repayment to reduce interest cost outgo and partly for financing the company’s foray into multiple therapeutic drugs segment.