Suven Pharma Plans Rs 20 Crore R & D Spread

Suven Pharmaceuticals Ltd, the Hyderabad-based contract research and manufacturing services (CRAMS) company, is expanding its research and development (R&D) facilities. This includes setting up of a new cGMP kilo lab, an R&D lab to produce kilogram quantities, and upgradation of existing pilot plant into cGMP (current good manufacturing practices) standards.

Besides, Suven is also setting up a cGMP manufacturing facility through its subsidiary, Suven Synthesis Ltd. These new initiatives involve an investment of about Rs 20 crore.

Disclosing this, Venkat Jasti, the managing director of the company, said, "We want to increase the size and enhance the analytical capabilities of R&D facilities to meet the challenges of Intellectual Property Rights (IPR) regime. We will be ready with our new facilities by June 2002."

Under its CRAMS business model, Suven supplies innovative chemical intermediates for the new chemical entities (NCEs) that are being launched by global life science companies.

The company feels that the CRAMS model will result in erratic results, depending on the commercialisation of NCEs, until it attains a critical mass and base loading is built up.

Suven is witnessing the same during the current year. After posting a profit of Rs 17.51 crore on a turnover of Rs 62 crore for the fiscal 2000-01, the company could achieve a turnover of Rs 20 crore in the first half of the current fiscal. Going by the current outlook, Suven may have to witness a 30-35 per cent fall in turnover for the current year, Venkat said.

"Unless some of the 20-odd intermediates, that are in the pipeline, are commercialised, we a have to report a dip both in turnover and net profit this year. Commercialisation of our intermediates depends on the commercialisation of NCEs," Venkat explained.

Last year, Suven commercialised two intermediates for the NCEs market and the contribution of these two to the turnover was about Rs 39 crore.

Venkat believes that the path chosen by the company will certainly yield results in another 2-3 years.