Max India Opts Out Of Pharma Sector, Reviews Joint Ventures

The Rs 325-crore Max India group is getting out of the pharmaceutical formulations sector. It has sold off a number of its patented brands to Swiss major Rounc Plonc and is reviewing a marketing deal with the United States-based company Upjohn to sell some speciality medicines.

This is surprising as the pharma business in India has become buoyant with both formulations and bulk drugs recording healthy growth growth figures this year.

The sale of patented brands to Rounc Plonc has landed Max India in a spot of bother as employees of its formulations plant at Okhla near here are accusing the company of "deliberately" trying to sack staff made redundant after the sale of brands. The plant is owned by a group company, Pharmax Corporation Ltd.

 

Industry sources attribute the value of the brands bought by Rounc Plonc at Rs 41 crore. Following the merger of Upjohn with Swiss company Pharmacia, both sides in the Max-Upjohn alliance are reviewing their relationship.

A company spokesman said the decision to get out of the formulations business was prompted by a recognition that the company's strength lay in bulk drugs.

He said the sacking of 20 staff was on disciplinary grounds and the question of future use of the Okhla plant and the fate of the rest of the staff was being attended to by the management.

It was premature to say whether the plant would be closed or not, he added.

He declined to comment on the money earned by Max through the sale of brands on grounds that this would go against a confidentiality clause in the Max-Rounc Plonc deal. The Max-Upjohn accord was very much on and the review was being done to decide the next step in the relationship like spinning off a joint venture, he said.

To strengthen its presence in the bulk sector, the company recently set up a plant at Nanjangud in Karnataka which marked the company's entry into the non-penicillin bulk drugs sector.

The US federal drug authority approved plant would enable quick entry and exit from specific bulk drug markets.