Nicholas to rake in $30m sales via 2 contract deals

Nicholas Piramal India, the country's fourth-largest pharmaceutical company in terms of domestic sales, today announced two contract manufacturing deals with multinational pharmaceutical companies that would translate into sales of $30 million (around Rs 135 crore) a year.

It will incur a capital expenditure of Rs 20 crore ($4.4 million) for the two manufacturing contracts.

While Nicholas Piramal said one order was from Allergan Inc to supply bulk drugs for manufacturing anti-glaucoma medicines betagan, alphagan and alphagan-P, it is tight-lipped on the other deal.

The company, however, said that it is a Fortune 500 firm and the order was for primarily manufacturing finished drugs for sale in the US. The contract runs until October 2011 and shipments are expected to begin by mid-2005.

The company also announced that it is acquiring the contract for manufacturing anti-glaucoma drug ingredients from the Hyderabad-based Alpex International. Nicholas Piramal will pay Rs 13.3 crore to Alpex to buy out the assets related to the drug ingredient. Alpex originally had the development rights for the anti-glaucoma drug ingredients.

The contract with Allergan Inc is for bulk drugs for two anti-glaucoma medicines and the contract with the other company was for a variety of pharmaceutical products.

Nicholas will manufacture products under this contract at its facility at Pithampur in Madhya Pradesh. The unit is due for inspection by the US Food and Drug Administration in 2005. It will spend Rs 7 crore as capital expenditure towards this contract.

Nicholas Piramal said that its primary focus would be to enter into contract manufacturing deals with drug innovator companies that would enable it step up its exports to half its sales in five years from less than 10 per cent at present.

The stock jumped over 6 per cent to Rs 1,115, touching a new record high of Rs 1,132 in early trade session.