Mumbai-based analysts have identified Ranbaxy Laboratories, Dr Reddy's Laboratories and Orchid Chemicals as potential candidates for a Nasdaq listing. However, these expectations come laced with concern over the presence of patent-infringing molecules in most domestic drug firms' portfolios.

"Ranbaxy and Dr Reddy's are possibly, at this point, the only companies with potential for a Nasdaq listing, though this could take time. But the absence of patent laws could certainly make things difficult. Patents is as emotional an issue there, as in India," says an analyst with Insight Asset Management.

But analysts are confident that most drug firms would "clean up" their portfolios by the end of the transitional period for adoption of product patents. "By 2005," says an analyst with Prime Broking, "the percentageof patented products in Dr Reddy's portfolio is expected to be either negligible or absent".

While Dr Reddy's maintains that it has no plans to pursue a Nasdaq listing "at this point in time", the company's accounts are already drawn up as per US generally accepted accounting principles (US Gaap) standards.

A non-US company entering the US public market is required to either present its financial statements in accordance with US Gaap or to reconcile the statements to this standard. Experts say that this exercise often proves to be a challenge to a prospective non-US registrant both in terms of identifying and quantifying such differences as well as from the standpoint of the sensitivity of the disclosure of this information.

Meanwhile, an analyst with a leading stock-broking firm claims that Orchid Chemicals could be another potential candidate to pursue an international listing. The company has started presenting its financial statements as per US GAAP standards since 1997-98.

According to Orchidgeneral manager (finance) DS Bhaskara Raju, "As a company oriented towards international markets and committed to world-class technological and quality standards, it would be logical for us to consider listing in an international stock exchange in the medium term. However, we cannot commit any time frame for this".

But Raymond James, one of the four US brokerages behind the hugely-successful Nasdaq listing of Infosys Technologies, believes that domestic drug firms may not, after all, be that far behind.

"In pharma, there would undoubtedly be some Nasdaq listings soon. It's not just listings alone, there would be a lot of action through private placements and strategic investments by US investors in local pharma firms. But Nasdaq is the logical point for a fast-growing pharma company," said John Band, executive director, ASK-Raymond James.