Troikaa Pharma to put Sanand plan on hold till December 2010

Expects to get patent approvals for Dynapar AQ in 99 countries in six months

Troikaa Pharmaceuticals Ltd has decided to delay its plans to set up a manufacturing facility over 75 acres in Sanand near Ahmedabad on hold till December next year as the company does not want to stretch its resource base that is currently being used to expand its personnel base.

The Sanand facility would require an investment of around Rs 150 crore that will be funded by 70:30 debt-equity. The company does not plan to go out with a public offering to raise funds.

Buoyed by the demand for its injectable Dynapar AQ, for which it has been granted patent in around 40 countries so far, the company now plans to shift part production of Dynapar AQ to its Sanand facility from Dehradun.

"However, as we are in the process of adding around 400 sales representatives within the next few months to expand the reach, we are not going ahead immediately with the Sanand plan and will start work only in December next year. We have the land in possession, and expect to have the approvals in place by July next year," said Ketan R Patel, managing director, Troikaa Pharma.

He explained that currently, nearly 70 per cent of the Dehradun plant capacity is getting used up in the production of Dynapar AQ. The plant has a capacity to manufacture three million injectables per month.

In Sanand we plan to have a capacity of around six million injectables per months, besides tablets, capsules and topical preparations, Patel said adding that part of or the entire production of its Thol facility, around 25 kilometers from Ahmedabad, could also be shifted to Sanand.

Both the Dehradun and Thol facilities are certified by the World Health Organisation for following Good Manufacturing Practices (WHO-GMP). Sanand will not be an export oriented facility, Patel confirmed.

Meanwhile, the company has received patent approvals for Dynapar AQ from nine countries in Eurasia last week besides 31 countries in Africa. It has applied for patents in 99 countries in all after it first filed for a patent in India in 2005 and at the World Intellectual Property Organisation (WIPO), the UN intellectual property rights body, in 2006. "We expect to have nods from the remaining countries within the next six months. We recently had a patent approval from Australia for our novel drug delivery system for Diclofenac injections, Dynapar AQ," Patel said. The Australian patent is the first one granted among regulated countries. It is now expecting patent approvals in the United States, European Union and Canada soon.

Diclofenac injections are used for management of painful inflammatory conditions. Compared to conventional diclofenac injections, Dynapar AQ causes negligible pain and can be injected in the upper arm, unlike the conventional one injected in the buttocks. Also, Dynapar AQ produces higher blood levels as compared to conventional diclofenac injection, thereby providing superior anti-inflammatory action. "We are eying to have a 25 per cent market share in all the new markets that we enter with this product. Leaving the US and the EU apart, in all the other countries the landed cost of diclofenac injections is around three to five cents while it sells at around $2 for a single dose. We can easily garner a huge market share by positioning our product in a lower price bracket.", said an upbeat Patel. It enjoys a 40 per cent market share in Diclofenac injections in India and hopes to take it up to 60 per cent next year.

There is huge opportunity in the US that currently uses Kitorolac in place of Diclofenac, Patel felt while adding that exact market size estimates were not available. Exports constituted nearly 18 per cent of the company's net turnover in 2008-09 and is likely to go up to 25 per cent in this fiscal when it hopes to touch revenues worth Rs 145 crore. Troikaa aims to record a 40 per cent in 2010-11.