Saturday, May 26, 2007

An outsourcing hub for generics


Chennai-based Shasun Chemicals and Drugs is the biggest bulk and intermediaries manufacturer of Ibuprofen (anti inflammatory drug). As a part of its transformation initiative, the company is reducing its dependence on Ibuprofen and has leveraged its relationships with the innovator companies to strengthen its Contract Research and Manufacturing Services (CRAMS) segment. Vimal Kumar, whole time director Shasun Chemicals talk about company’s strategic plans.

Can India emerge as an outsourcing hub for global pharma industry?

India is strongly positioned to be the outsourcing hub for the global pharma industry for those products that are nearing the end of their patent life or those that have already turned generic. The industry in India is equipped with the right kind of quality manpower as well as equipment and facilities and is also well positioned in terms of capabilities and capacities to handle any process technology challenge. One advantage offered by India in CRAMS was the cost of hiring chemists at one-fifth of what companies pay abroad. The innovator companies are increasingly looking at the outsourcing ($10 billion a year opportunity), allowing them to focus on areas like basic research and marketing. India’s share, at present, is less than 2%.

How has Rhodia’s custom synthesis business aided the company to ramp up its CRAMS?

Rhodia Pharma Solutions, UK was acquired by Shasun through our subsidiary Shasun Pharma Solutions Ltd. (SPSL) in March, 2006. SPSL is into providing research and manufacturing services to the pharmaceutical industry.

Shasun is primarily in API business.How is it now moving up the value-chain?

We have now built up the capability of producing formulated products in the recent past. The formulation facility has already undergone successful MHRA and US FDA audits. Partners of Shasun have filed three ANDAs so far and are expected to file another eight to nine this current financial year. The formulation business would start contributing revenue from this year and is expected to ramp up to Rs 100 crore by FY 2010. With the acquisition of Rhodia, Shasun is today owns 62 patents around three major technologies viz, HKR, ABF and Trifluoromethylation. The access to these has facilitated us to be more of technology oriented player than pure manufacturing player.80% of Shasun’s revenue comes from three products, viz., Ibuprofen, Ranitidine and Nizatidine.