Earnings for the quarter ended December 31, 2008 (Q3 FY09)

Standalone earnings
Chennai-based pharma major Orchid Chemicals & Pharmaceuticals Ltd. (Orchid) achieved a turnover and operating income of Rs 310.21 crore for the quarter ended December 31, 2008 (Q3 FY 08-09) in comparison to Rs 330.76 crore registered during the corresponding third quarter of last fiscal. Earnings before Interest & Tax (EBIT) stood at Rs 66.10 crore compared to Rs 74.87 crore during the corresponding quarter of last year.

Consolidated earnings
On a consolidated basis, Orchid’s turnover for the quarter ended December 31, 2008 was Rs 336.12 crore as against Rs 347.38 crore registered during the corresponding quarter of last fiscal. Profit/loss after tax (after considering a loss of Rs 31.15 crore due to the exceptional item of foreign exchange loss on FCCBs) stood at a loss of Rs 4.67 crore as compared to a gain of Rs 49.96 crore of the corresponding quarter of last fiscal (which included an exceptional item due to foreign exchange gain on FCCBs of Rs 6.43 crore).

Earnings for the nine months ended December 31, 2008

Standalone earnings
Orchid’s turnover and operating income for the nine months ended December 31, 2008 registered a growth of 12% and stood at Rs 964.98 crore as compared to Rs 860.63 crore registered during the corresponding period of last fiscal. Earnings before Interest & Tax (EBIT) stood at Rs 190.49 crore compared to Rs 199.77 crore registered during the corresponding period of the previous year.

The depreciation in the value of Rupee vis-à-vis Dollar resulted in a notional loss on FCCBs which is reflected in the accounts for this period as opposed to the notional gain reflected in the accounts of the corresponding period of the previous fiscal. Profit/loss before tax (prior to exceptional item on account of exchange loss/gain on the FCCBs) was Rs 91.04 crore as against Rs 142.92 crore of the corresponding nine months of the last fiscal. After considering the exceptional item on account of exchange loss/gain on the FCCBs, for the nine months ended December 31, 2008 the company registered a loss of Rs 80.49 crore compared to a profit of Rs 221.97 crore registered during the corresponding nine months of the last fiscal. At the net (PAT) level, the company registered a loss (due to the loss on the exceptional item of Rs 171.52 crore) of Rs 78.62 crore compared to a PAT of Rs 168.68 crore (which included the exceptional item gain of Rs 79.05 crore) of the corresponding nine months of the last fiscal. EPS for the period was negative at Rs 11.46 compared to a positive EPS of Rs 25.55 of the corresponding period of last year.

Consolidated earnings
On a consolidated basis for the nine months ended December 31, 2008, Orchid achieved a turnover and operating income of Rs 1035.45 crore as compared to Rs 908.48 crore achieved during the corresponding period of last year. Earnings before Interest & Tax (EBIT) stood at Rs 193.52 crore compared to Rs 191.4 crore of the corresponding period of last fiscal.

At the Profit after tax (PAT) level, the company registered a loss (due to the loss on the exceptional item of Rs 171.52 crore) of Rs 76.48 crore compared to a positive PAT of Rs 159.41 crore (which included the exceptional item gain of Rs 79.05 crore) registered during the corresponding nine months of the last fiscal.

Quote from the Managing Director
“Orchid’s overall business segments have witnessed a steady revenue pattern during the third quarter of this fiscal. We are confident that our strong product pipeline spanning key therapeutic segments of Cephalosporins, Penicillin Injectables and Non-antibiotics will power the overall growth and profitability in the ensuing quarters”, said Mr K Raghavendra Rao, Managing Director, Orchid Chemicals & Pharmaceuticals Ltd.

API Business
Orchid’s base API business posted a sale of Rs 119.23 crore compared to Rs 124.88 crore registered during the corresponding period of last fiscal. Increasing share of API production continued to be integrated with manufacture and sale of formulations for various markets, led by the US.

Formulations Business

Regulated Generics
During the 3rd quarter of this fiscal, Orchid consolidated its market position in the US generics market. Key products launched earlier such as Cefepime, Cefdinir and Cefoxitin continued to post stable sales. Non-antibiotic products, Terbinafine and Granisetron, also started to generate a good scale.

During the quarter under review, Orchid clocked USD 26.8 million (Rs 130.20 crore) in revenues from the US market.

Emerging markets
Orchid’s emerging markets (including domestic) business posted a healthy growth of 17% to register a turnover of Rs 33.91 crore during the quarter under review. Key markets like India, Latin America, CIS countries and others contributed positively to the overall turnover of the business.

Regulatory update

Orchid continued to enhance its regulatory pipeline by filing Abbreviated New Drug Applications (ANDAs), Marketing Authorisations (MAs) and Para IV FTF applications.

Filings - API
In the API (Active Pharmaceutical Ingredients) segment, Orchid increased its cumulative US DMF (Drug Master File) filing count to 70. The break-up of the total filings is 26 in the Cephalosporin segment, 31 in the NPNC segment, 2 in the Penicillin Injectables segment and 11 in the Carbapenems segment.

In the European market space the cumulative filings of CoS (Certificate of Suitability) at 20 which included 12 in the Cephalosporin segment, 7 in the NPNC segment and 1 in the Penicillin Injectables segment.

Filings - Formulations
During the quarter under review, Orchid filed 4 ANDAs for the US market, taking the cumulative count of ANDA filings to 57. This includes another Para IV FTF (First-To-File) filing for a key product, taking the total Para IV FTF ANDA filing tally to 7. Of the total ANDAs filed 29 pertain to the Cephalosporin space, 5 in the Penicillin injectables segment, 20 in the NPNC space and 3 in the Carbapenems space.

In the EU market, of the cumulative count of Marketing Authorizations at 19, 15 pertain to the Cephalosporin segment, 1 to the Penicillin injectables segment and 3 to the NPNC segment. A few more dossiers have been lined up for filing in Q4 of this fiscal, based on the DCP slots allotted by the respective RMS (Reference Member States) countries in the EU.

Approvals
During the quarter under review, Orchid received USFDA approvals for Cefuroxime Sodium Injections range in the Cephalosporin segment and for Divalproex delayed release tablets in the NPNC (Non-penicillin, Non-cephalosporin) segment. With these 4 approvals, the cumulative count of ANDA approvals by the USFDA has moved to 29, out of which 26 are in Cephalosporin segment and 3 are in the NPNC segment.

In the EU market, Orchid received its second MA (Marketing Authorisation) approval (Cefpodoxime Proxetil tablets) during the quarter under review. The first MA approval of Orchid pertains to Piperacillin-Tazobactam Injections which was received earlier.

Further approvals from the USFDA for other products which are in the final stages of review are expected in the current quarter. Similarly, Orchid expects further approvals in other regulated markets like Canada, EU & ANZ in the ensuing quarters.

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