The fast-growing company expects to close the current fiscal with revenues of around Rs 275 crore and profitability exceeding 10 per cent. Net forex earnings are expected to be in the region of $47.5 million in 1999-2000. In its latest annual report, Cheminor says that sales of ranitidine in the US are expected to commence during 1999-2000 as the original patent holder has been given an extension for six months. The company's formulations unit has already been inspected by the US FDA and tentative marketing approval has been received for ranitidine, it adds.

Cheminor managing director GV Prasad says that the company has built up a generic pipeline of abbreviated new drug applications (ANDAs) that are already filed and has ongoing development work on severalblockbuster drugs with potential sales of $50-100 million by 2001-2002.

The company has already filed ANDAs in the US for omeprazole (an anti-ulcer drug) and fluoxetine hydrochloride (an anti-depressant), besides ranitidine 75 mg, the cumulative sales value of which have been pegged at $6.9 billion. On a comparative basis, this translates to more than twice the size of the total Indian market, it adds.

Elaborating on the potential of the generics business, the company says that omeprazole is worth $2.9 billion in the US alone. ``Assuming a price discount by the range of 70-90 per cent and a realistic market share estimate of 3-10 per cent, sales for this molecule alone can range from $8 million per year to a possible upside of $80 million,'' the report says.

However, Cheminor has been sued by AstraZeneca and Eli Lilly, both US-based companies, on the grounds of patent infringement on the omeprazole and fluoxetine ANDAs respectively. Industry analysts add that Cheminor's fluoxetine ANDA prospects may beeclipsed by a $4 million partial settlement reached between Eli Lilly and three generic firms, Barr Labs, Geneva Pharmaceuticals and Apotex Inc. If Cheminor is successful in the patent litigation, sales of both products would commence in 2001, subject to the company obtaining the necessary approvals, the report says.

INSIGHT
Alliance with Schein to boost generics thrust

Cheminor Drugs will not be the only company that will be eying the US market when ranitidine finally goes off-patent. However, Cheminor, as compared to other companies, has the advantage that it has a strategic equity alliance with Schein Pharma in the US to boost its generics thrust. Schein Pharma holds an 18.04 per cent equity stake in Cheminor Drugs. Apart from Cheminor, Dr Reddy's will also benefit from the move as it manufactures the product but does not have the FDA clearance.

The other area of interest for Cheminor which is of more importance as far as the stock market is concerned is that the company is settingup a novel drug delivery system.

With the success of Ranbaxy, any company entering this area is likely to get a better discounting.

Shishir Asthana