Orchid Pharma freezes at 10% down circuit as promoter begins stake sale

Dhanuka Laboratories, one of the promoter of Orchid Pharma proposed to sell in aggregate up to 3.28 million equity shares, representing 8.04 per cent of the total equity share capital of the Company.

Shares of Orchid Pharma were locked in 10 per cent lower circuit at Rs 1,187.85 on the BSE on Thursday as the company's two-day stake sale through an offer for sale (OFS) began today. The floor price for the offer has been fixed at Rs 375 a share.

Dhanuka Laboratories, one of the promoters of Orchid Pharma, proposed to sell in aggregate up to 3.28 million equity shares, representing 8.04 per cent of the total equity share capital of the Company. The issue opened today for non-retail investors, and will open for retail investors on Friday.

The sale is being undertaken by the seller, inter alia, for achieving the minimum public shareholding, the company said in its notice to exchanges. As of March 31, 2021, the promoters held 98.04 per cent stake in Orchid Pharma, the shareholding pattern data shows.

Orchid Pharma is pioneer in Cephalosporin Antibiotics, R&D focused, inventor of Enmetazobactam (Ph.-3 Trials done in US & EU) acquired by Dhanuka Group through Corporate Insolvency Resolution Process (CIRP) process on April 1, 2020.

While announcing March quarter results on May 22, 2021, Orchid said that it had developed a new molecule known as OCID-5090, which was licensed to a company named Allecra Therapeutics, this molecule was undergoing the clinical trials and the molecule has cleared the Phase 3 clinical trials.

Allecra Therapeutics would now either directly or through out license file for NDA of this molecule. Allecra has already out licensed the product to Haini Pharmaceuticals, China for the Chinese Territory at a value of $78mn plus royalties.

As per the IP Agreement between Orchid Pharma and Allecra Therapeutics, Orchid is entitled to receive a Royalty of 6-8 per cent on the worldwide sales of the product. Therefore, once the molecule is commercialised, Orchid can expect a regular stream of Royalty from Allecra. Further, the rights to develop and commercialise the molecule in India (which is under patent protection) remain with Orchid Pharma, and the company is evaluating the various options to commercialise the product, the company said.