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Zydus Cadila in knowhow agreement with UK firm for transdermal patches 

Anju Ghangurde  
Mumbai, January 20: Zydus Cadila has forged a know-how licence agreement with Ethical Holdings of UK and Beta Pharma Corp of Uruguay to manufacture and market transdermal patches in India. While the Rs 15 crore facility is planned at Moraiya (around 20 km from Ahmedabad), the deal involves a consideration of $90,000 payable by Cadila to Ethical.

Cadila Healthcare managing director & CEO Pankaj R Patel told The Financial Express that construction would begin by June 2000, while production is likely to commence by March 2001. The global market for transdermal therapeutic systems (TTS) is estimated to touch $7 billion by 2005 and Cadila holds the exclusive licence to market these products in India, Sri Lanka and Nepal. Indications are that a royalty of 3 per cent on the net sales is payable for a specific time frame to the UK-based company.

Patel said that the alliance broadly covers five products and the company will begin with the manufacture of patches containing nicotine (to reduce craving for cigarettes) and diclofenac sodium (for analgesic or anti-inflammatory indications). The installed capacity at the proposed facility is 10 million patches per annum.

TTS has emerged as an alternative route of delivery for many drugs. This drug delivery system has opened interesting possibilities for the administration of drugs that may not, otherwise, be delivered safely.

The flurry of activity at Cadila comes even as the Ahmedabad-based company is in the midst of securing regulatory approval for its mega initial public offering (IPO), of 1,48,86,000 equity shares of Rs 5 each via the book building route. Promoters are diluting roughly 25 per cent of their holding in the company.

The total issue size is estimated at Rs 500-600 crore and the premium component, bankers say, could be in the region of Rs 350 to Rs 398 per share. The issue includes a book built portion of 1,33,97,400 equity shares and a fixed portion of 14,88,600.

Zydus Cadila president Ganesh Nayak said that the book opens on February 7 and closes on February 16 and the pre-marketing exercise would commence on February 1.

The issue is being jointly managed by JM Morgan Stanley, Kotak Mahindra Capital and DSP Merrill Lynch. Nayak said that the company is ready with three new drugs-atorvastatin (which goes into the Pfizer-Warner Lambert's Lipitor), celecoxib (goes into Searle's Celebrex) and sildenafil citrate (goes into Pfizer's Viagra). Cadila's Atorva (atorvastatin) is priced at Rs 16 compared with international prices of Rs 400, while Zycel (celecoxib) is expected to hit the market by March. Also on cards are two acquisitions in the US market, besides two 100 per cent subsidiaries-in South Africa (already set-up) and New Zealand.

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