You are here » Home » Companies » Company Overview » Orchid Pharma Ltd

Orchid Pharma Ltd.

BSE: 524372 Sector: Health care
NSE: ORCHIDPHAR ISIN Code: INE191A01019
BSE LIVE 19:40 | 19 Oct 18.10 0.35
(1.97%)
OPEN

17.85

HIGH

18.20

LOW

17.60

NSE 19:31 | 19 Oct 17.95 0.25
(1.41%)
OPEN

17.70

HIGH

18.00

LOW

17.55

OPEN 17.85
PREVIOUS CLOSE 17.75
VOLUME 26449
52-Week high 39.70
52-Week low 16.70
P/E
Mkt Cap.(Rs cr) 161
Buy Price 0.00
Buy Qty 0.00
Sell Price 18.10
Sell Qty 50.00
OPEN 17.85
CLOSE 17.75
VOLUME 26449
52-Week high 39.70
52-Week low 16.70
P/E
Mkt Cap.(Rs cr) 161
Buy Price 0.00
Buy Qty 0.00
Sell Price 18.10
Sell Qty 50.00

Orchid Pharma Ltd. (ORCHIDPHAR) - Chairman Speech

Company chairman speech

ORCHID CHEMICALS AND PHARMACEUTICALS LIMITED ANNUAL REPORT 2009-2010 CHAIRMAN'S REPORT Dear fellow shareholders, On behalf of the Board of Directors, I take pleasure in welcoming you to the Eighteenth Annual General Meeting of your Company. Your Company's annual report and accounts have been with you for some time, and with your permission, I shall take them as read. Over the next few minutes, I will attempt to provide a summary of the key events of the previous year, the challenges and opportunities our business faces and the strategy to sustain our growth and strengthen shareholder value. Sale of the Intertables business - a game changer Fiscal 2009-10 will be remembered as a milestone in your Company's journey. We took one of the most challenging decisions in our history. We sold our generic injectable formulations business for US$400 million to Hospira Inc., a generic injectable drug major. I must reiterate that this was a prudent decision. It was the preferred solution for strengthening our future growth canvas and sustaining our commitment to shareholder value creation - which has been the foundation of our strategy since we went into business. Addressing shareholders' anxiety Since inception, your Company established a strong foothold in niche therapeutic segments which are relatively uncluttered due to the inherent technical complexity. In doing so, your Company grew in size and is now a global name in its operating domains. In recent times, your Company's performance in the global and domestic markets could not translate into robust growth for the Company and superior shareholder value creation. This was primarily owing to the sizeable debt burden which weighed heavy on your Company's profitability. With the debt levels coming down and with a strong growth strategy in place, this is set to change going forward. My fellow shareholders may have a number of apprehensions about the future of the Company's growth and its profitability. I take this opportunity to put these to rest. Shareholders may be of the opinion that the management sold the Company's future business drivers. To this, I would like to mention that we prudently disinvested business segments where growth would have anyway slowed owing to the product life-cycle and generisization. Also, this segment represented 1 7% of your Company's total business. Shareholders feel that the valuation of the Company on the bourses could depreciate as it might be viewed as an API manufacturer. I have a simple answer to this. The DNA of your Company will remain unaltered - we will continue to leverage on our inherent strengths of identifying niche opportunities, where strong value can be created through science and technology and where market shares and exclusive positions can be made possible by design. For instance, we are among the first set of global manufacturers of Tazobactam-Piperacillin, Meropenem and Imipenem APIs for the two large regulated regions (the US and the EU). Our focus is to be in the right place at the right time, creating the right value, be it in APIs or finished dosage forms. Strategies for tomorrow What next? This is the question on the minds of the shareholders. We have drawn up a growth blueprint for the Company, segregated into short and medium-term business drivers focusing on ramping up of the existing business verticals, creating front-end marketing organisations and entering new high-growth product segments. In the short term, we have identified key areas which will drive business growth for your Company. We will cater to the API needs of Hospira and other global innovators in addition to our regular API and formulation sales in the emerging markets. We will strengthen our geographical presence in key regulated markets like the US, Europe and Japan. Currently, we are marketing around 10 products in the oral cephalosporins segment and 5 products in the NPNC (Non-penicillin, Non-cephalosporin) segment. Your Company will further strengthen its product basket for catering to these markets. Our focus on acquiring front-end marketing companies possessing infrastructure, people, product registrations and approvals will augur well in the medium term. Our product pipeline in the regulated markets will be filled with our own molecules, ANDAs and in-licensed products. This will help us strengthen our product basket and maximise and internalise value which was earlier shared with our marketing partners. Our achievements in 2010-11, so far The performance of your Company in the first quarter of the current financial year reflects the start of a robust growth journey. Going forward, your Company is well poised to ramp up its API and formulations business based on specific product-market contracts and regulatory filings which will help spread the growth canvas wider. We entered into an out-licensing and distribution agreement with the US- based pharma major Alvogen for marketing 8 oral non-antibiotic generic formulations in the US market. These products cater to the high-growth therapeutic segments of CNS and osteoporosis, among others and have a cumulative addressable market size estimated at USD 8 billion. Your Company also recently acquired Karalex Pharma, LLC, a US-based generic marketing and sales services company through an all-cash deal for creating a front-end presence in the US market to deliver generic products to the US customers directly. Karalex Pharma is a leading provider of generic pharmaceuticals, focused exclusively on the US healthcare market. This acquisition will provide a strong US-based sales capability, paving the way for synergistic returns from our upcoming and long-term strategic generic pharmaceuticals pipeline, comprising key first-to-file and Paragraph-IV products. This move also provides your Company, for the first time, with a complete end-to-end coverage capability of the entire generic pharmaceutical business cycle from product development to product sales and would facilitate internalization of value for shareholders. Regulatory achievements Your Company continues to strengthen its regulatory filings, expected to open new vistas of opportunity upon approval from the respective regulatory agencies. As of June 30, 2010, your Company's cumulative ANDA filings for the US market stood at 36. This includes 8 Para-IV FTF (First-to-File) filings. The break-up of the total ANDA filings is: 13 in Cephalosporins and 23 in the Non-penicillin, Non-cephalosporin (NPNC) segment. Your Company's filing count in the EU market moved to 16. The break-up of the total Marketing Authorisations (MAs) filed is: 10 in Cephalosporin segment and 6 in the Non-penicillin, Non-cephalosporin (NPNC) segment. In the API (Active Pharmaceutical Ingredients) segment, your Company increased its cumulative US DMF filing count to 82. The break-up of the total filings is: 30 in the Cephalosporin Segment, 39 in NPNC segment, 2 in the Betalactam segment and 11 in the Carbapenems segment. The cumulative filings of CoS (Certificate of Suitability) for the European market stood at 20 which includes 13 in Cephalosporin segment, 6 in the NPNC segment and 1 in the Betalactam segment. With a robust product development pipeline, your Company's filing and approval count is poised to increase in the coming months and quarters. Regulated markets The US generic market, valued at over USD 30 billion, is the world's largest generic market and is a strong focus area for al I pharmaceutical companies across the world. In 2009, generics accounted for 72% of the US pharma market by prescription, a number that has been steadily rising and this is expected to continue over the coming years. This optimism is based on an important regulation passed by the US government that aims to make healthcare more affordable for 32 million previously medically-uninsured Americans. Moreover, regulations that increase the growth of the generics market are expected to continue owing to an important reality. According to a study by GPhA, for every 2% increase in generics use, the US Medicaid program can save an additional US$1 billion annually (Source: GPhA). Similarly the EU and Japan generic markets are also growing at a rapid pace and present a strong business opportunity. Your Company is drawing up specific plans to enhance its presence in these high-value markets. Research & Development Your Company's drug discovery activities are channelized through the wholly owned subsidiary, Orchid ' Research Laboratories Limited (ORLL). During the last fiscal, ORLL continued its research in the anti-infectives, anti-inflammation, anti-cancer and metabolic disorder areas and has achieved progress. Developmental candidates in anti-cancer and anti- inflammation areas have reached the stage of regulatory toxicological and safety studies. Under the collaborative research program with Merck which relates to the anti-infectives area, certain NCEs have been designed, synthesized and screened and your Company is confident of making good progress going forward. The multi-pronged strategy of proprietary and collaborative drug discovery and providing research and manufacturing services to MNCs such as Merck and Pfizer will balance the risk-reward equation in the complex drug discovery area and will also grow the team's intellectual capital exponentially. Your Company's state-of-the-art infrastructure for end-to-end connected discovery and development will facilitate seamless execution of these projects. Strategy for the medium term We expect strong year-on-year growth over the next three years by focusing on the non-penicillin, non-cephalosporin (NPNC) segment where we possess a strong basket of over 73 products spanning diverse therapeutic areas. We possess marketing alliances in the US and Europe with prominent players such as Actavis, North Star and Alvogen for 31 NPNC products. We also expect to capitalise on Para IV opportunities; our 8 Para IV FTF filings provide a revenue potential of about US$80 Mn. A favourable outcome in any patent challenge litigation could result in our being awarded the 1 80-day exclusivity. Going ahead, we are working on niche product areas, which have limited global competition and strong revenue visibility. These product segments will power the growth journey of our Company and provide a strong platform for a well-diversified and niche product portfolio. Message to stakeholders Before I conclude, I take the opportunity to thank the Central and state governments, financial institutions, public and private sector banks, government agencies and non-government institutions for extending their support in your Company's growth and development. I thank your Company's valued business stakeholders namely vendors, customers, strategic alliance partners and business associates for their exceptional support during difficult times, in accomplishing our business plans. Most importantly, I acknowledge the critical role played by the employees whose contribution to your Company's business growth has been paramount. On behalf of the Board, I would like to thank all the shareholders for their unstinted support in helping your Company enhance its technological and business strengths and remain on the growth path. Thank you for your attention!. Chairman.