Nicholas, Roche end marketing pact

Pharmaceutical company Nicholas Piramal India and Roche Diagnostics of Germany have mutually agreed to discontinue a pact allowing Nicholas to sell Roche's diagnostic and patient care products in India.

The decision will come into effect from January 1, 2005 after which Roche Diagnostics will take over the distribution of the products itself.

Roche will pay Nicholas Piramal $22 million by January 2005 for terminating the pact. Additionally, Roche will also take over the company's field force handling Roche's products.

An industry observer said this was good news for Nicholas as the company was earning only around $15 million for marketing the products annually and profits would be much lower so this one-time gain of $ 22 million, which will go straight to its bottomline, puts the company in a better position.

Nicholas Piramal India has posted a 7.66 per cent growth in its profit for the quarter ended September 30, 2004 at Rs 54.39 crore, up from Rs 50.52 crore for the quarter ended September 30, 2003. Total income has increased from Rs 356.97 crore in the second quarter of 2003-04 to Rs 360.92 crore in the quarter ended September 30, 2004, an increase of 1.10 per cent.

Nicholas Piramal India also informed the Bombay Stock Exchange today that its board has decided to split every equity share of face value of Rs 10 into 5 share of face value of Rs 2 each, subject to requisite approval of the members.

The Nicholas Piramal stock was down 3.49 per cent on the BSE today closing the day at Rs 983.10.