Aurobindo lines up Rs 300 cr capex

Hyderabad-based drug maker Aurobindo Pharma  Limited (APL) will have a capital expenditure, including maintenance expenditure, of about Rs 300 crore in the current financial year. This is apart from the investments made in acquisitions so far this year, according to managing director, N Govindarajan.

During this year, Aurobindo made strategic acquisitions and investments in Hyderabad-based Celon Labs to enter the oncology and hormones space and Silicon Life Sciences for ensuring supplies of penem non-sterile active pharmaceutical ingredients (APIs) to feed into AuroNext,  a joint venture between APL and BR Sikri Associate of the ABS Group.

The company has also acquired Hyacinths Pharma Private Limited, having 52 acres of land with all statutory clearances in place, for future expansion. “The cost of these acquisitions is in the range of Rs 60-70 crore,” Govindarajan said during the company’s conference call on earnings.

Talking about peptides, he said the commercial facility of Auro Peptides, a subsidiary of APL, was now ready with two modules.

The company expects to file its first product before the end of this financial year that would trigger an inspection of the facility by various regulators.

Stating that globally 32 peptides were commercially available, Govindarajan said Auro Peptides was capable of making each of these peptides. “We feel strongly that we will be a predominant player as we progress once we start getting approvals in regulated markets,” he added.

Elaborating on this aspect, he said globally there were two large companies in peptides, one based in Europe and the other in the US. So, APL would be the third to have this capability in terms of not only technology but as well as the entire competency with the people.

According to some studies, the peptide field is currently evolving and by 2018 the global peptide industry could be $15-18 billion.  “So, clearly there is a huge potential, but for us we will say in the next few years we will be reaching the range of $100-200 million,” Govindarajan said.

In the case of penems, he said AuroNext had already filed one product. The second product was under stability and the third would also be ready before the end of this financial year.

In the second quarter of the current financial year, APL posted a net profit of Rs 235 crore on a turnover of Rs 1,913.9 crore, registering a year-on-year growth rate of 5.7 per cent and 27.6 per cent respectively.