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Aparna Krishnan

MUMBAI, May 12

EXPORTS and research and development initiatives will be the key growth drivers for the Baroda-based Sun Pharmaceuticals Industries Ltd. The company is expected to increase its expenditure on R&D substantially and will file about five to six Abbreviated New Drug Applications (ANDAs) with the USFDA (United States Food and Drug Administration) this year.

According to Mr Dilip Shanghvi, Managing Director, Sun Pharmaceutical Industries Ltd, "We also plan to take up our revenue R&D expenses from Rs 30 crore this year to something close to Rs 100 crore in next two to three years.'' Currently, the company has in 2002-03 spent Rs 65 crore on R&D, which includes setting up of infrastructure as well as maintenance costs. The maintenance costs, which account for 50 per cent will increase substantially in the next two years, company officials said. "Around 40-45 per cent of the R&D budget would be for innovative products as well as the US market, and around 55 per cent would be for process development. We expect this number for innovation to go up from 40 per cent to 65-70 per cent at high growth rates in two to three years.''

Innovative research will be in two areas, namely, novel drug delivery systems (NDDS) and new chemical entities (NCEs). The company has recently, set up another research centre in Baroda which is expected to be operational by December-January.

Sun Pharmaceuticals is also scouting for partners to market its products in Europe. The company has zeroed in on three countries and is likely to set up alliances with one local partner in each of these countries.

According to Mr Dilip Shanghvi, Managing Director, Sun Pharmaceuticals Industries Ltd, the international formulations business will be a big part of the company's future business as well as growth. The company has the majority stake in Caraco Pharma in the US through which it has gained an entry into the regulated market.

"Caraco Pharma will be filing five to six ANDAs this year,'' Mr Shanghvi said. Caraco has so far filed about 10 ANDAs and has just registered a turn around of sorts with net profit at $2.2 million in the first quarter of 2003 on net sales of $8.7 million.

Sun Pharma is also setting up a new manufacturing site at Jammu with an investment of Rs 25 crore. The site, currently, under construction is expected to be completed and commissioned by this year-end. The venture was formed as a partnership between Sun Pharma with 95 per cent stake and its key employees benefit trust with 5 per cent stake.

For the year ending March 31, 2003, Sun Pharma recorded a 35.1 per cent rise in profit after tax at Rs 231.41crore over a total sales of Rs 858.74 crore, which is up by 14.8 per cent.

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