Aanjaneya Lifecare Set To Join Hands With Japanese Pharma Major For Breakthrough Anti-Malarial Molecule for Collaborative Research & Co-Marketing
Aanjaneya Lifecare Set To Join Hands With Japanese Pharma Major For Breakthrough Anti-Malarial Molecule for Collaborative Research & Co-Marketing
Financial Muscle To Be Robust With Foreign Currency Convertible Bonds – Dr Kannan Vishwanath, MD, Aanjaneya Lifecare Ltd.
Around 80 per cent of new drugs are brought to market by the big global majors, even though only 35 per cent of these have been developed by them from the earliest stage. Smaller companies engaged in research often find going the full course up to the market beyond their means and end up out-licensing their NCEs to the big pharmas. India, the country most affected by malaria in the South East Asian region, is projected to see a decrease of 50-75 per cent in malaria case incidence by 2015, a report by the World Health Organization said. The WHO’s World Malaria Report 2012 said a concerted effort by endemic countries, donors and global malaria partners during the past decade has led to strengthened malaria control around the world. It however warned that a significant slowdown in global funding. Mumbai-based Aanjaneya Lifecare Limited Aanjaneya Lifecare having a significant presence in this segment, is the world’s third-largest manufacturer of quinine salts and the second-largest in India. Only nine companies globally manufacture quinine salts. Aanjaneya is only the second company to receive WHO prequalification for its anti-malarial APIs and formulations, is inching closer to a breakthrough research in the form of a Molecule in Research Partnership for collaborative marketing with a leading Japanese Pharma Major. If sources are tobe believed than the that the drug which has a 10 tears of Research could cure all strains of malaria with a single oral dose and also block transmission of the deadly parasite from person to person. It may be noted here that Of the four major types of malarial parasites, it is plasmodium falciparum, carried by the female anopheles mosquito, which causes about 90 per cent of the malaria deaths. Synriam, is intended to combat falciparum malaria, has two major advantages over other drugs like chloroquine. Its dosage regimen is just one tablet for three days, while other drugs have to be taken twice or four times a day for three or more days. Interestingly Ranbaxy worked for a revolutionary Drug with Research going for 15-years of drug discovery. Cipla is also a leading player in this market. With this partnership, Aanjaneya Lifecare which is a leading supplier to most of the Indian Companies will look forward for a better deal in doing business in india. With a significant market presence with manufacturing and marketing capabilities in APIs (Active Pharmaceutical Ingredients) with focus on anti-malarial, and finished dosage forms (FDFs) , Aanjaneya Lifecare could fetch a bigger fortune as anti-malarial drugs market in india is growing at ~25% & Anti-malarial market size in India is estimated at Rs600 crore. The Company is yet to enter into domestic branded formulation market, though it has plans to start the fiercely competitive Indian market operation by early 2013.
Dr Kannan Vishwanath, Vice Chairman & Managing Director of Aanjaneya Lifecare Ltd in an exclusive interview to Satya Brahma, Editor-In-Chief of Pharmaleaders Group spoke on wide gamut of business & expansion plans including the decline of share prices due to tough market conditions. Aanjaneya Lifecare Ltd stock was trading at Rs.299.80, down by Rs.15.75 or 4.99%. The stock hit an intraday high of Rs.299.80 and low of Rs.299.80.The total traded quantity was 213 compared to 2 week average of 21517.
- 1. According to data available with the stock exchanges, shares of Core Projects tumbled 62 per cent and was the biggest loser on the entire BSE, while scrips of Aanjaneya Lifecare, Sudar Inds, Flexituff, ABG Shipyard, Welcorp and Gemini Comm crashed by 20 per cent each. Any Specific Reasons?
Answer: If you look at the overall scenario, you will get a clear indication that some of the biggest Midcaps have been losing grounds primarily because of the toughest market conditions & Aanjaneya Lifecare is not an exception. We are definitely disturbed as trading in stock exchange has become challenging but this is a temporary phase, we have a strong growth plans & we are gearing for top gear with our ambitious plans. The Board of Directors of Aanjaneya Lifecare Ltd at its meeting held on March 05, 2013, have decided that the date of opening of issuance of FCCB up to USD 75 million is on March 12, 2013. Of late, we find a huge fluctuation in the market prices of our scrip and it is disturbing for us. In order to achieve the growth plans of the Company, we are in dialogue with our International Bankers for raising resources for the expansion through FCCB. The international investors are cautious due to wide fluctuation in the market price of our scrip.”
- 2. The S&P BSE mid-cap index fell by 1.20 per cent and S&P BSE small-cap index lost 1.36 per cent.What are the reasons for this decline?
Answer: As explained earlier, this is a volatile market conditions in all S&P BSE mid-cap index. You can’t expect healthier trading every day. Please look at our performances in our Annual Report, we have outpaced industry standards. While it will take sometimes to gain the momentum, we are confident of good numbers. No need for Investors to be panic. Investors can be assured of their returns as they have been getting earlier. Global Market volatility is also one of the factor. The midcap universe came under pressure largely on account of concerns about their earnings as some of them have reported Q3 numbers, which came below market expectations.
- 3. While your Net profit declined by 13.9 per cent to Rs.10.45 crore from Rs.12.14 crore, though its net sales increased sharply by 35.6 per cent to Rs.145.86 crore from Rs.107.58 crore. What is your expectations from the next quarter?.
Answer: Please look at our announcement which is much healthier. With new capacities to be added in next 6 to 9 months the company will be expanding operations in emerging markets of South East Asia, Africa & South & Central America and its domestic operation in branded generics segment. The Company has reported a growth in the total Sales to the extent of 35.58% at Rs 1458.64 million during the third quarter ended 31st December 2012 compared to Rs 1075.78 million during the same period last year. The net profits for Q3 amounted to Rs 104.53 million as against Rs 93.37 million for the previous quarter ended 30th September 2012 and Rs 121.42 million for the corresponding period of previous year ended 31st December 2011. We will have a bigger chunk in next quarter though I can’t specify the numbers, it will definitely be bigger.
- 4. Aanjaneya Lifecare has been a dark horse in Pharma Scrips since its IPO in 2009 as it has been consistently performing. Why there is a sudden fall?
Answer: As I have mentioned in my earlier note, we have a sound financials with a robust processs mechanism. Our Corporate Governance is our biggest strength. We have no huge debtors like other Pharma Companies. We have recorded good performance in a difficult period and the future is bright. We are seeing a promising period for the company one in which we could achieve our goals set towards customer satisfaction, quality standards and of course shareholder value. We will keep the growth momentum focused & visible. Coming Days will spell out our success in overseas markets.
- 5. Do you have any overseas creditors as speculations are that you may have pressure to pay off?.
Answer : There are no such overseas creditors except our domestic vendors who import machineries from abroad.
- 6. What are your expectations on the normalcy to prevail & bring back Investors confidence?.
Answer: As you will be aware that Aanjaneya Lifecare Limited has got approval to issue Foreign Currency Convertible Bonds to eligible foreign investors amounting Rs.405 crore. We are working on the modalities & soon some positive news will come as I cant divulge more details at this point of time.
- 7. What is your take on Union Budget 2013 & how Pharma sector has been represented?
Answer. The Entire Indian Inc has welcomed Finance Minister’s Budget on a positive note & I can say that Chidambaram had a tough task to meet. He has gone by reforms & Prudence & not by Populism. Though I would have been happier if he would have announced some landmark decisions. However, it has a ambitious direction. An industry that has grown from being fully dependent on foreign companies a few decades ago to being an indigenous entrepreneur-driven industry with over Rs 64,000-crore market today, an industry that has over 10,000 small and medium enterprises and about 300 large enterprises all over India, an industry that provides over 64,000 safe and efficacious medicines at affordable prices, an industry that provides employment to over 40 lakh people, an industry that has contributed significantly in improving the standard of life and life expectancy, bringing down the death rate and infant mortality rates etc. of our people, an industry that our Government is very proud to showcase to the world as ‘Pharmacy of the World’, an industry that has earned the respect, admiration and dependence of all countries of the world for providing safe, efficacious, affordable quality medicines – has been completely ignored in the Budget as pointed out by Secretary General of Indian Drug Manufacturers Association, Mr Daara Patel.. The pharmaceutical industry has been facing problems of huge CENVAT accumulation due to the inverted duty structure resulting in blockage of working capital and affecting competitiveness in international market and this needed to be addressed urgently. Considering the long-term benefits of R&D to the economy at large, all excisable goods used for R&D purposes should have been exempted from excise duty as also import of all capital goods to boost our R&D activities to produce and provide our people with the latest more therapeutic medicines, exemption of physician samples from central excise duty, and reduction of customs duty on all life-saving drugs, etc.The Indian pharma industry has always responded to the urgent calls of our Government, both in Centre and in States, in times of disaster and natural calamities by providing free medicines anywhere in India, without minding the production costs and expenses involved in reaching the medicines to those affected victims. It is sad that despite our repeated requests and representations, the Government continues to tax these voluntary free medicines by imposing excise duty and sales tax on them. It has been a very lopsided budget, in that investment allowance @ 15 per cent has been allowed to manufacturing companies that invest more than Rs 100 crores in plant and machinery in the next two years. Most of the manufacturing industries in India are small scale driven, with even our Prime Minister calling them ‘engines of growth’. How many companies can invest ‘more than Rs 100 crores’? It effectively blocks the lakhs of MSME units in India, not to mention over 10,000 units in the pharma industry from availing of this benefit. The 12th Five Year Plan in the report on MSME sector states that it is the “major base of manufacturing sector in India, with its contribution of over 45 per cent in the overall industrial output and calls for “substantial enhancement of plan allocation for the sector during the 12th Plan to address major bottlenecks facing the sector.”
No wonder many in the Indian pharma industry now feel that it is a futile exercise to spend time and effort providing our pre-Budget proposals for drafting the Union Budget year-after-year, as the Finance Ministry has been ignoring the industry time and again in the last few budgets.
- 8. Experts see Markets may see consolidation, Q3 results to set tone& Stock markets are expected to see some consolidation this week amid traders expected to closely track the next batch of quarterly results. What is your take on this?.
Answer: Yes very true, the Market is going to be robust & Q3 results will be better for most of the Pharma Companies who are performing well. As far as Aanjaneya Lifecare is concerned, We are sure to cross the good numbers.
- 9. Market is abuzz with speculation that Aanjaneya Lifecare is inching closer to a Japanese Drug Maker for a Collaborative Breakthrough in Anti-Malaria Segments to produce & Market Drugs in your Pune Facilty. Can you explain more on this?.
Answer: I have been getting this news from the market & from media reports ever since a delegation of pharmaceutical firms from Japan’s Toyama prefecture indicated few days back while they were in india that Japanese companies were keen to collaborate with Indian pharma companies in trade and technology development. Toyama, which is recognized as the cluster city of pharmaceutical industry in Japan, has around 100 companies. Japanese Delegation had said that they were looking for long term partnerships with Indian companies. There is immense scope of exporting Japanese products to Indian market and similarly Indian products can be traded in the Japanese market,”. And I think, I think it is too early to speculate on meetings with Japanese Companies.
- 10. The Deal is widely perceived that you may be the First one to tie up with a Japanese Firm to give you market access to Regulated Market. Is this True??
I can’t speculate on media reports. I am neither denying nor announcing anything. It is true that Aanjaneya Lifecare has plans to enter into the regulated markets, but we can’t comment on any developments as there is nothing to share as of now.
