Tokyo, December 11:  Japan bio-venture firm LTT Bio-Pharma Co. Ltd. said on Monday it had tapped Indian drug maker Cipla Ltd to help it develop nanosteroids, which have the potential to be more effective and produce fewer side effects than conventional steroid treatments.

LTT Bio-Pharma, whose stock shot up nearly 4 percent on the news, said that as part of the deal, it would outsource the production of nanosteroids to Cipla.

The company has had good results in animals with nanosteroids and says it hopes to begin clinical trials within two years.

Nanosteroids are a drug delivery system in which steroids are inserted into a polylactic acid particle with a width of only 150 nanometres.

The use of the particle, which is delivered by intravenous injection, allows for a slow release time so that the drug can be effective for up to a week, the company said.

Nanosteroids also allow a targeted delivery that should help reduce side effects, which can be severe in conventional steroid treatment.

Steroids are used to treat a variety of diseases including arthritis and allergy-related diseases.

LTT Bio-Pharma said there were many bio-venture firms around the world working in nanomedicine but it believed it was the only one working on nanosteroids, which are much more difficult to make than other medicines.

LTT Bio-Pharma shares, listed on the Mothers start-up section of the Tokyo Stock Exchange, were up 1.9 percent at 108,000 yen in afternoon trade.

World AIDS Day 2006

Cipla's chairman and managing director Yusuf K Hamied has led the global fight against HIV/AIDS from the front. Cipla was the first company to radically bring down the price of anti-AIDS triple combination drugs from $12,000 per patient per year to below $1 per day way back in 2001. Today 1.3 million people living with HIV are on anti-retroviral drugs. One-third (400,000) are being treated on the company's drugs at a cost of $150 - $200 per patient per year. He was awarded Padma Bhushan in 2005. Excerpts from an interview with Yusuf K Hamied by Rajiv Tikoo of The Financial Express:

India decided to protect intellectual property rights since the beginning of last year. Does it mean that people who are on anti-retrovirals (ARVs) may not be able to get or afford second line treatment or the newer generations of drugs in the future?

Currently, Cipla is offering most of the HIV/AIDS drugs that were invented prior to the WTO Agreement on patents (1995) at affordable prices. However, unless the Doha Declaration of 2001 is implemented without change, Cipla may not be able to make affordable versions of new and emerging medicines. Having said that, I would like to add that there are 40 million people infected with HIV worldwide today. All of them don't need treatment. Only 6.5 million actually require treatment. Out of these, only 1.3 million are being currently treated. There is therefore a lot of scope to implement treatment for the remaining people using the present range of existing medications.

One does not have to resort to newer second and third line of treatment immediately.

These should be used only for people, who have developed resistance to the current drugs.

Is the Doha Declaration a failure despite providing for compulsory licensing?

No, it will not be a failure if it's implemented fully. The world should accept the Doha Declaration in totality. It is essential that our Indian government upholds the Doha Declaration of 2001 in its entirety. This allows countries to judge for themselves what is a health crisis and implement a compulsory licensing agreement on patents in a manner that is conducive to access all medicines at affordable prices.

Why isn't the Indian government doing it?

In reality, India was pressured last year into broadening the scope of patents and narrowing the scope of compulsory licensing beyond its obligations under the TRIPS agreement, what we now call TRIPS Plus. They say that they were under a great deal of international pressure. I believe that every country should decide its own destiny. India's destiny should be decided in Delhi and not in the corridors of power in Washington or London.

Are you against intellectual property rights?

Intellectual property should be suitably rewarded. However, third world countries including India cannot afford a monopoly in healthcare. I am not against patents per se, but I am vehemently against monopoly. Prices of all drugs under monopoly are bound to skyrocket. Poor countries like ours simply cannot afford monopoly in healthcare.

If our government persists in following its present hard line patent policy, it will certainly lead to selective genocide in healthcare by 2015 with the majority of the Indian population unable to afford essential medicines.

The governments may not be living up to the expectation, what are you doing?

Way back in 2001, Cipla was the first company to radically bring down the price of anti-AIDS triple combination drugs from $12,000 per patient per year to below $1 per day. Today 1.3 million people living with HIV are being treated by anti-retroviral drugs. One-third, approximately 400,000, are on Cipla's medicines. The cost to the patient is $150 - $200 per patient per year for Cipla's flagship product Triomune, the first triple drug therapy to be available worldwide. Triomune has just been approved by the US Food and Drug Administration (USFDA) under a new drug application (NDA). Cipla is now eligible for US President's Emergency Plan for AIDS Relief (PEPFAR) for Triomune. So are other USFDA approved ARVs from Cipla.

How do you manage to price your HIV/AIDS drugs so low?

Cipla manufactures over 1,000 drugs and if Cipla sells a dozen drugs at virtually cost or below cost, it is no big deal.

Does it mean that you aren't making any profits on your HIV/AIDS drugs?

Cipla is selling ARV drugs at very, very affordable prices.

But why does Cipla do it?

It is Cipla's humanitarian role as a provider of health care. It all depends on what one wants out of life. Let us do some good during our lifetime. Cipla's mission statement reads: "Success does not make a company great. What really matters is its contribution towards making life better for everyone." Isn't this enough of a service to our country, the world and mankind.

Then why are you offering drugs at a higher price in India than in Africa?

There is an import duty factor of up to 15-20% on raw material that goes into making active substances used in HIV/AIDS medicines in India. When Cipla exports its ARV drugs, it is usually in response to international tenders for large quantities. Prices are therefore lower. The Indian government should remove all duties on raw material for ARV drugs. Cipla has time and again requested for this, but no action has been taken as of date.

How far away is an HIV vaccine?

Unfortunately, no vaccine is currently available. There is a possibility that one may be developed in the next decade, but how effective it will be and at what cost we cannot predict today. In any case, if the vaccine is covered under international patents and sold under monopoly, it will be prohibitively expensive.

What we should do today is to concentrate our efforts to control HIV with the range of ARV drugs that are currently available.

So are ARVs the only saviours right now?

More importantly, we need to remove the stigma associated with HIV. We need to recognise that HIV is no longer a death sentence, but can be regarded as a chronic ailment. God forbid, if one had to choose between being affected by HIV or say stomach cancer, the former would be far more preferable.

So, how to break this HIV stigma?

We all need to think afresh and openly discuss this major problem. Just like we have red ribbon as AIDS symbol, let us have a similar green symbol, which could indicate that a person has been tested for HIV, without disclosing the test results. Also one should consider having some form of mandatory testing for pregnant woman or patients who are undergoing surgery, etc.

You have been called a revolutionary, a Robin Hood of sorts. How does the pharmaceutical industry treat you ?

At all times, I get maximum respect and appreciation from all my colleagues in the industry, both in India and internationally. Everyone knows and believes in his/her heart that what Cipla is doing is the best for India and the developing world. There is no doubt about this. And Cipla will always do what is best for the country and the people of India and also the third world.

Ras Al Khaimah: Akhil Gupta, Chief Financial Officer of leading Indian telecom services provider Bharti Airtel, celebrated a triple success at the first CFO Awards for India hosted by the Ras Al Khaimah Free Trade Zone and broadcast by CNBC-TV18.

The awards panel voted Gupta the Best CFO of the Year and Best Performing CFO in the telecommunication sector, and to crown the evening he was also named the people's choice as the Best CFO of the Year.

Gupta received his awards at a glittering ceremony in Ras Al Khaimah on Saturday night which was attended by Shaikh Saud bin Saqr Al Qasimi, Crown Prince and Deputy Ruler of Ras Al Khaimah, Shaikha Lubna Al Qasimi, UAE Minister of Economy, Shaikh Faisal Bin Saqr Al Qasimi, Chairman of the Ras Al Khaimah Free Trade Zone, and Shaikh Salem bin Sultan Al Qasimi, Chairman of the RAK Department of Civil Aviation.

Annual event

The 2006 CFO Awards for India was televised in India by CNBC-TV18 to an estimated audience of 38 million viewers.

"It was a great pleasure to come to Ras Al Khaimah and I'm honoured to receive the awards," said Gupta, who also won the keys to a new Toyota Corolla.

"The viewers' award was especially satisfying. That's something you just don't expect" he added.

Shaikh Saud, Shaikha Lubna and Shaikh Faisal all joined the pre-eminent awards panel on the stage for the presentations which brought together 60 of India's top senior Chief Financial Officers and is now expected to become a major annual event.

The 2006 CFO Awards for India have been designed to recognise and reward financial excellence and leadership and honour individuals who have emerged as 'Thoughtful Leaders'. A pre-eminent awards jury initially assessed more than 1,000 CFOs from a range of categories reflecting the diverse nature of finance.

Mr. Amar Lulla with Gyles Brandreth at the 2006 Scrip Awards

“We are delighted and honoured on being bestowed the Scrip Best Company in an Emerging Market Award. The award pays testament to the tremendous team effort of all Ciplaites who share their joy on receiving this honour” commented Mr. Amar Lulla – CEO of Cipla.

Scrip's Best Company in an Emerging Market Award honours achievement by a pharmaceutical company in emerging markets of Asia, Central and Eastern Europe, Central and South America, the Middle East and Africa based on excellent performance across the business, from growing sales and profits to new product launches.

SOME years ago, investors were hooked to Ranbaxy Labs' growth story and the many earnings triggers that lay ahead. Cipla in comparison was a company that got little attention, partly because its strategy seemed quite dull compared to Ranbaxy. That is because, more than Cipla, Ranbaxy Labs has been a pioneer in the Indian pharma industry.

Ranbaxy led the way when it began investing in discovery research, when it entered the US generic market, and recently, made headlines by challenging patents of global pharma giants. Ranbaxy's high-risk high-return model had paid off in the past, while Cipla's lower risk strategy seemed less appealing. However, investors have been flocking to Cipla. While Ranbaxy has been going through a rough patch over the last two years, Cipla's steady strategy has proved more rewarding. Ranbaxy Labs' net profit was down 54% to Rs 256 crore in the year ended March '06, compared to Rs 730 crore in the year ended March '04. In comparison, Cipla's net profit more than doubled to Rs 608 crore in '05-06, from Rs 296 crore in '03-04.

The effect on their share prices is visible. In the past two years, Ranbaxy Labs fell 23% while Cipla's share price has gone up by 138%. The ET healthcare index, ET Lifex, has risen 47% over the same period. Cipla has overtaken Ranbaxy in market capitalisation. At around Rs 200bn, Cipla's market cap is Rs 47bn more than Ranbaxy Labs. Two years ago, Ranbaxy Labs' market cap was more than twice that of Cipla.

According to analysts, Cipla's strategy has shown to be more suitable to today's scenario, in which competition is increasing and pricing pressure is relentless. With a ground presence in 49 countries, products available in 125 countries, and manufacturing operations in eight countries, Ranbaxy is the most globalised pharma company in India. In '05, Ranbaxy's formulation sales in markets outside India were $463m (40% of overall revenue). On the contrary, Cipla does not have its own marketing presence anywhere outside India. Cipla is also very geographically diversified, it exports to 160 countries and exports account for around 50% of its revenues.

However, the company is present in all markets through partnerships and is, therefore, focused on its core competencies of product development and manufacturing. Cipla tied up for the US market with Teva/Ivax, Watson, Morton Grove, Sandoz /Eon and Akorn. In Germany, it entered into agreements with Stada, Hexal and Ratiopharm, in the UK with NeoLabs, and in South Africa with Medpro.

While having its own marketing and distribution set-ups involves, if successful, higher payoffs than that from partnership, there are significant risks and downsides associated with this strategy. Important front-end investments and high fixed costs is one of them. According to a recent CLSA report, in absolute terms, Ranbaxy has the highest fixed-cost base amongst top Indian pharma companies at $518m. While Ranbaxy spends around 45% of sales on fixed costs, Cipla has the lowest fixed-cost allocation as a proportion of current sales at 24.4%.

As a result, increasing pricing pressures in the domestic and international markets have had a higher impact on Ranbaxy's business. While Cipla's exports almost doubled over the past two years, Ranbaxy has been plagued by poor organic growth across geographies even as fixed costs associated with a large geographic presence keep on rising. Aggressive spending on legal expenses for patent challenges has also not borne fruit for Ranbaxy Labs. According to company sources, Ranbaxy spent around Rs 250 crore on legal expenses in '04 and '05, while Cipla has not filed any patent challenge in the US.

High research and development expenditure has also weighted down Ranbaxy Labs profits over the past two years. Ranbaxy spent Rs 493 crore or 9.5% of sales on R&D in '05-06, while Cipla R&D expenditure stood at Rs 120 crore or 4% of sales. Over the last two years, Ranbaxy Labs spent Rs 221 crore on R&D capital expenditure, as against just Rs 44 crore for Cipla.

Going forward, however, Cipla's strategy could prove not as sustainable. “Cipla has been very aggressive in terms of new product launches in the domestic market, which has helped the company to achieve good margins. However, a slowdown in new product launches can be expected because of the company's low R&D,” said an analyst to ET. “However, this downside will be compensated by international business, which is expected to continue to witness strong growth in the future,” he concluded.

(Head2Head is an occasional column which will give you an insight into the performance of two or more industry peers)

Cipla has launched an HIV drug called Viraday. MD at Cipla , Amar Lulla says that this drug is much needed because AIDS patients do acquire resistance to the existing drugs and this is where it plays a significant role.

He adds that this drug will form a significant part of exports and they are in the process of registering this new combination in various parts of Africa .

Excerpts from CNBC-TV18's exclusive interview with Amar Lulla:

Q: What does this launch mean and what kind of revenues are you looking at from this launch?

A: More than revenues, this is an important combination. This is a combination of three drugs that is Tenofovir, Emtricitabine and Efavirenz and it's a very important combination because it's a new combination.

This is the first time that this combination has been launched in India at about one tenth the international price. This drug is important and it is much needed because AIDS patients do acquire resistance to the existing drugs and this is where it plays a significant role.

Q: Will this also form a part of your export package to countries that require this drug, which may ask you for it?

A: Yes, it will and it is an important part of the new therapy. This will form a significant part of the exports and we are in the process of registering this new combination in various parts of Africa .

Q: What kind of ballpark revenues are you looking at in India and abroad and through exports from this product for about the next three years?

A: In the next two-three years this will be a significant addition on the topline, though we are right now subsidising it and not having significant margins on it. But this could be a part of the USD 50 million products.

Q: That is only in India or including exports?

A: To begin with it will be in  India , and then exports.

Q: Any other product launches in this space, that is in HIV drugs?

A: We have some more coming in and particularly we are looking at immunity boosters and other additions in the opportunistic infections . So we are looking at a complete package in treatment of AIDS.

Q: When are you expecting to announce these launches, are they likely to come within a quarter itself?

A: Some additional products are likely to come in this quarter.

Q: In terms of distribution for this drug itself are you looking at some acquisitions abroad, which will help you to distribute this drug better or will it be largely through the government and World Health Organisation kind of agencies?

A: This will be largely through government fundings and through global fundings. This will be through the treatments that are in programmes right now, being carried out by the governments of various countries. So it will not be a private market distribution.

Pharmaceutical firm Cipla on Friday said it has set up a wholly owned subsidiary in Dubai in a bid to explore export opportunities in the middle-east countries.

In a communiqué on the Bombay Stock Exchange Cipla said it had set up the subsidiary, Cipla FZE, at Jebel Ali Free Zone in Dubai, United Arab Emirates (UAE).

The Mumbai-based company added that the subsidiary had been set up for exploring export opportunities in the middle-east countries.

The country' second largest pharmaceutical company Cipla is in talks with the developers of Goa's first pharma special economic zone (SEZ) to acquire 80 acres of land for setting up its largest pharmaceutical formulation plant.

The company, which is planning this world standard facility at the SEZ located at Bhootkhamb near Keri in Goa , would invest about Rs 650 crore in the new unit.

Cipla joint managing director Amar Lulla said that “We are in negotiations with the SEZ developers to buy the required land for the proposed formulation manufacturing facility and the new plant is expected to come up in two years.”

The Keri park is the first pharma SEZ planned in Goa . The Goa Industrial Development Corporation (GIDC) had last year allotted 1.2 million sq mt of land to Meditab Specialities to develop the formulation specific SEZ.

The Rs 2300 crore Cipla already has two formulation manufacturing facilities located at Verna in Goa .

The company's another new export oriented manufacturing unit for active pharma ingredients (APIs) and formulation was commissioned at Patalganga in Maharashtra early this year. Cipla had also expanded its production facilities at Baddi in Himachal Pradesh this year.

“We have also planned major additions to our manufacturing facilities at Kurkumbh and Bangalore ,” said the company sources.

Earlier this year, Cipla had raised $170 million ( Rs 782 crore) through global depository receipts (GDR) envisaging few key investments in the current financial year. The GDR issue is to fund expansions as well as its proposed growth programmes abroad.

The company, which has been in the chemistry-based medicine manufacturing and marketing for almost seven decades in India, is now planning to enter biotechnology as well.

Looking at this opportunity, Cipla had recently tied up with Avestha Gengraine Technologies (Avesthagen) for a biopharmaceuticals development programme.

The company is also currently in talks with biotechnology companies in Europe and China for acquiring large capacity manufacturing facilities along with latest fermentation technology.

Helpage India has felicitated Cipla Ltd., with SILVER PLATE AWARD 2005-2006.  The award was received by Mr. Davinder Singh – Technical Director, Cipla from Mr. Somnath Chatterjee, Honourable speaker, Lok Sabha at function organized by Helpage India to celebrate International Day of Older Persons on 1st October 2006.

The award is given for Cipla's valuable contribution to society and Philanthropic support.  Cipla is known for its benevolence and has been instrumental in the growth and effective development of Helpage India Mobile Medicare Units programme to a large extent.  Medicines thereby donated by Cipla have enabled the Mobile Medicare Units to expand its network and quality of the treatment to the underprivileged elderly.

“Dun & Bradstreet – American Express Corporate Awards 2006” announced

D&B felicitates 20 of India's biggest corporate names and highest performers from 58 sectors

HIGHLIGHTS
Dun & Bradstreet (D&B), the world's leading provider of business information, and American Express, present the Dun & Bradstreet – American Express Corporate Awards 2006 in association with Singapore Tourism Board, Lenovo and Kingfisher Airlines

Mr. M. Damodaran, Chairman of SEBI launches the 2006 edition of the premier Dun & Bradstreet publication “India's Top 500 companies”

The Awards ceremony attended by over 300 chiefs of India's most prestigious companies

Mumbai, 17th August 2006 : Dun & Bradstreet (D&B), the world's leading provider of global business information, knowledge and insight, today announced and presented the ‘Dun & Bradstreet – American Express Corporate Awards 2006' in Mumbai. The occasion marked the launch of the premier Dun & Bradstreet India (D&B India) publication, India's Top 500 Companies 2006 by Mr M. Damodaran, Chairman, Securities and Exchange Board of India (SEBI) . The base universe of the companies considered for the Dun & Bradstreet – American Express Corporate Awards 2006 were the top 500 companies of India as covered under the publication. The Awards were organized in association with Singapore Tourism Board, Lenovo and Kingfisher Airlines.

Recipients of the ‘Dun & Bradstreet – American Express Corporate Awards 2006'

No.	SECTOR NAME	COMPANY NAME
1	Oil - Refining and Marketing	Reliance Industries Ltd.
2	Banks	ICICI Bank Ltd.
3	Iron and steel	Steel Authority Of India Ltd.
4	Power - Generation, Transmission, Distribution	NTPC Ltd.
5	Oil and Gas – Exploration	Oil And Natural Gas Corporation Ltd.
6	Heavy Engineering / Capital Goods	Larsen & Toubro Ltd.
7	Software and ITeS	Infosys Technologies Ltd.
8	Pharmaceuticals	Cipla Ltd.
9	Automobile - LCVs / HCVs	Tata Motors Ltd.
10	Cement	Gujarat Ambuja Cements Ltd.
11	Fertilisers	Tata Chemicals Ltd.
12	FMCG	Hindustan Lever Ltd.
13	Non-Ferrous Metals	National Aluminium Company Ltd.
14	Automobile - Two Wheelers	Hero Honda Motors Ltd.
15	Gas - Processing, Transmission & Marketing	GAIL (India) Ltd.
16	FIs / NBFCs / Financial Services	Housing Development Finance Corporation Ltd.
17	Trading	MMTC Ltd.
18	Auto Components	Motor Industries Company Ltd.
19	Shipping and Logistics	The Shipping Corporation Of India Ltd.
20	Hotels	The Indian Hotels Company Ltd.

Mr David Emery, President, International Partnerships and Asia Pacific, Dun & Bradstreet, said, “Since 1997, only 50% of companies in the Top 500 have been common across all editions, thus highlighting that the Indian corporate sector is in churn. I am very happy to note that most of tonight's award winning companies have featured in all editions of India's Top 500 Companies over the past decade.”

Dr Manoj Vaish, President & CEO - India, Dun & Bradstreet , said “The Dun & Bradstreet – American Express Corporate awards tonight recognize the twin virtues of size and growth in the organizations of corporate India. A vital factor observed among companies who have managed to retain their position among the Top 500 has been their strength to compete and their commitment towards quality and efficiency. Many have extended their reach to overseas markets and are in the process of restructuring and consolidation.”

Dun & Bradstreet's “India's Top 500 Companies 2006” includes private sector companies listed on the BSE and NSE as well as public sector enterprises. The private sector companies have been short listed on the basis of their market capitalisation on the BSE and NSE, India's two main stock exchanges. The listed companies profiled account for over 75% of the BSE's market capitalisation while the total income of the Top 500 accounts for 50% of India's GDP. Another feature of the publication is the sectoral classification of companies based on revenues. A company should generate at least 35% of its revenue from a particular sector in order to be classified under that sector.

The publication “India's Top 500 Companies 2006” identified 58 sectors for classifying the companies, and the Dun & Bradstreet – American Express Corporate Awards 2006 felicitated the top company from 20 of the identified sectors. The awards methodology was applied to the list of top 500 companies, duly classified in their respective sectors. The D&B analyst team developed a proprietary financial model for identifying the top companies in each sector. D&B identified seven financial parameters for this purpose and assigned weights to them. Final rankings of the companies were based on a composite score of these weighted parameters. The seven parameters considered in ranking companies for awards are Total Income, Net Profit, Net Worth, Net Profit Margin, Net Profit/Net Worth, Growth in Total Income and Growth in Net Profit.

About Dun and Bradstreet (D&B) : D&B (NYSE:DNB), the world's leading provider of global business information, knowledge and insight, has enabled customers to Decide with Confidence for over 160 years. D&B's proprietary DUNSRight™ quality process provides customers with quality information whenever and wherever they need it. D&B manages the world's largest and most valuable commercial database of over 100 million companies. This database updated more than 1.5 million times a day is the foundation of D&B's solutions that customers rely on to make critical business decisions.

Customers use D&B Risk Management Solutions to mitigate risk, increase cash flow and drive increased profitability, D&B Sales & Marketing Solutions to analyse markets, locate prospects and increase revenue from new and existing customers; D&B Export Marketing Solutions to gain significant insight into overseas markets and increase sales; D&B Financial Education Solutions to facilitate professional growth and excellence among their executives and D&B Economic Analysis Group to derive pragmatic and solution-oriented analysis of strategic economic and business developments, thereby aiding informed decision making. For more information, please visit www.dnb.co.in

MUMBAI: Cipla has teamed up with generic major Ivax, now Teva, to supply
an active pharmaceutical ingredient (API) for a paediatric drug in US
market.

Following the expiry of the patent on this drug in September last year,
Teva bagged the exclusive marketing rights.

This is the third API in recent months that Cipla has signed. In the
recent past, it got into an arrangement for supplying APIs to Pfizer and
Merck.

Joint managing director Amar Lulla refused to identify the API Cipla has
agreed to supply Ivax. "We are under confidentiality agreements with
Ivax. Besides, the agreement is for 50 products," he said.

While others scout for acquisitions and challenge patents, Cipla
focusses on earnings stability.

At a time when domestic pharmaceutical companies are being acknowledged
worldwide for their acquisitions and patent challenges, local investors
have given a thumbs-up to Cipla's ‘safe' strategy by making it the most
valuable pharma company in the country in terms of market
capitalisation.

Mainly focused on the domestic market, Cipla has largely refrained from
big-ticket acquisitions overseas, new molecules research and patent
challenges.

Ranbaxy Laboratories and Dr Reddy's, both of which lean heavily on
acquisitions and patent challenges, are ranked third and fourth,
respectively.

Sun Pharma, in the second spot, marries the two strategies. It makes
acquisitions, but fewer – typically of loss-making companies and turns
them around. It also has a marketing operation in the US.

“The ranking could be influenced by investors perspective of investing
preferences in short term vs long term. As research productivity is a
challenge and top Indian players have faced many challenges in global
markets in the recent past, certain pharma business models pose more
uncertainities on shareholders' returns”, said Sanjay Aggarwal, pharma
sector leader, KPMG.

Cipla, then, presented a prospect of stable profitability with good
earnings per share, he added.

Concurs Sanjiv Kaul, managing director, ChrysCap: “Cipla has got its
market cap because it has delivered great shareholder value,
consistently quarter after quarter.”

The company employs a leveraging model where it undertakes product
development and manufacturing for international pharma. Its
international partner bears expenses concerning marketing, product
registration and litigation.

In case of a Dr Reddy's or a Ranbaxy, the inherent risk of research and
patent challenges in the model – despite the potential gains – gets
factored in.

Moreover, these companies are betting big on US and European generics
markets, and in the last one-two years, returns – especially from the US
– have been rather poor.

Most analysts, however, refute the belief that domestic investors
discount acquisitions, research and litigation. “The market cap does not
always reflect the true potential or valuation of a company. It merely
reflects the current sentiment,” said a sector expert.

Also, there is a difference in the time horizon that investors consider
versus the horizon companies work on. While investors, typically fund
managers and retail investors, do not look beyond the immediate year or
so, companies look at longer-term profitability, he added.

Investors have merely adopted a ‘wait and watch' approach with regard to
the performance of Ranbaxy Labs and Dr Reddy's and that explains their
third and fourth rankings.

“Once their strategies start paying off, the rankings could change
dramatically,” said an analyst.

To that extent, the market cap of Dr Reddy's has improved with the
player hedging its risks with private equity participation from
Citigroup and ICICI ventures in Perlecan Pharma; becoming the authorised
generics for cholesterol drug, simvastatin, in the US and going slow on
patent challenges.

Cipla has once again demonstrated the efficacy of its low-risk partnership based model in the overseas markets.

While Cipla has to share the profits with its foreign partners, it saves the company marketing and allied costs abroad. In the June quarter, its operating profit grew 52.7 per cent y-o-y to Rs 228.87 crore, as compared to a 30.3 per cent growth in net sales to Rs 863.58 crore.

Cipla's operating profit margin too has grown 390 basis points y-o-y to 26.5 per cent in the June 2006 quarter.

Earlier, generic players like Ranbaxy saw its consolidated operating profit improve by 571 basis points y-o-y to 18.2 per cent in the last quarter.

The Cipla stock has moved broadly in tune with the broader market over the past three months - it has fallen approximately 16.5 per cent during this period as compared to a 14 per cent dip in the Sensex.

The company's exports in the last quarter jumped 38.3 per cent y-o-y to Rs 393.8 crore.

Cipla saw improved demand for medications in segments like anti-retrovirals, anti-malarials and anti-asthmatics. Of crucial importance, is the export sales of formulations, which grew 48 per cent y-o-y. Analysts highlight that formulation exports have much higher margins via-a-vis APIs.

Cipla's domestic sales also expanded 20 per cent y-o-y to Rs 472.86 crore in the last quarter. Going forward, exports are expected to remain a key growth factor for the company.

However, with the stock trading at about 25 times estimated FY07 earnings, there isn't much room for further upsides.

There is good news for HIV patients. The first three-in-one combination single pill to treat AIDS will soon be launched by Indian drug companies at around Rs 1 lakh (per annum, per patient) — or around Rs 274 per day — which will be 80-85% cheaper than the global price of nearly Rs 7 lakh per patient per year ($15,000).

The single once-a-day pill will make the treatment cheaper and easier as against struggling with dozens of pills in a day.

The single pill, which is a combination of three drugs, also got US FDA nod on Wednesday. The pill, Atripla, which contains Bristol-Myers Squibb Co's drug Sustiva and Gilead Inc's medicines Viread and Emtriva, is the latest step in making it easier for AIDS patients to keep HIV in check.

Sources said that major Indian companies including Cipla and Hetero Drugs are already working on it, and may launch it close to the worldwide launch by foreign companies.

Cipla joint MD Amar Lula said, "We are ready with the formulation for the three-in-one single pill, and are applying to the Drug Controller of India for approval". The company's single once-a-day pill will be branded as Viraday.

He added that foreign companies have started following the example set by Cipla in launching fixed dose combinations to treat HIV.

In 2001, Cipla launched the first fixed-dose combination, Triomune that combined three antiretroviral drugs in one pill (twice a day), and offered it at $350 (Rs 15,000) per patient, per year as against global price of $10,439 (Rs 5 lakh).

This also became one of the frequently prescribed treatments in developing countries, making the treatment simpler and cheaper.

Hyderabad-based Hetero Drugs is also working on the fixed dose single pill and will launch it in a few months. The company's director-marketing, M Srinivas Reddy said: "We are waiting for the licence to initiate studies on the drug, and will launch it substantially cheaper than the global price".

Experts say that with more competition coming in, prices of these drugs would go down. Recently, Aurobindo Pharma got FDA approval to produce a generic version of a three-combination drug.

They added that the single dose pill is a new and better combination, and may soon become the preferred treatment for AIDS, because of its simplicity and lack of side-effects. The fixed-dose combination is based on the recent protocol by WHO for developing countries.

Pharmaceutical firm Cipla has got tentative approval from the USFDA for its abbreviated new drug application (ANDA) for anti-HIV/AIDS drug Slamivudine.

According to information available on the USFDA website, the tentative approval is for the oral solution of strength 10mg per ml.

The drug is in a class of medications called nucleoside reverse transcriptase inhibitors. It works by stopping the spread of the HIV and hepatitis B viruses.

The US Food and Drug Administration has given its tentative approval for Cipla Ltd's anti-AIDS drug lamivudine in oral solution form, the regulator said on its Web site.

Cipla shares were up 1.6 per cent at 230 rupees in a weak Mumbai market.

Cipla Ltd is planning to set up a Rs 384-crore manufacturing facility at Kurkumbh MIDC, about 75 km from here. Cipla said the new facility was being planned to meet growing demand of various products in the international market.

The new facility, with a capacity to produce 320 tonnes of API (active pharmaceutical ingredient) and 200 crore formulations per year, will produce antiretroviral, anti inflammatory, anti diabetic, anti bacterial, antipsychotic and anti hypertensive drugs.

Joint Managing Director of Cipla Amar Lulla confirmed the company's plans, saying the work on project is expected to commence in a couple of months. ‘‘According to the rules, approval of Maharashtra State Pollution Control Board is required to set up the facility. The work of setting up the plant would begin once the approval is granted,'' he said.

Lulla said the turnover of the existing plant was about Rs 1,000 crore. The new plant, a 100 per cent export-oriented-unit, is expected to add another Rs 1,000 crore to the annual turnover, he said. ‘‘No decision on awarding the engineering procurement contract for the new plant has been taken as yet. The plant would be indigenously run and Cipla would not have technical tie up with any foreign company for the project'', Lulla said.

The facility, which would come up near the existing plant of Cipla, is expected to create job opportunities for 400 people in the drought prone Daund taluka of Pune district. Besides, it will provide direct and indirect employment to another 200 people.

Cipla has already submitted the project report to the Maharashtra Pollution Control Board (MPCB) for approval. Hearing on the suggestions and objections would be held at Baramati on July 21 after which decision on granting No Objection Certificate (NOC) for the project would be taken.Cipla closed at Rs 225.25 on the NSE, up 2.3% in a firm market.

"Today Cipla has a strong team of over 7500 people and our major strengths would obviously be the commitment of our people and our technological capabilities, which has been the backbone of our growth curve. Cipla's manufacturing facilities today have been recognised among the best in the world by all concerned, including the regulatory agencies and our customers." - Amar Lulla, Joint Managing Director, Cipla

Cipla walked away with the award for ‘Sustained Growth'. S Radhakrishanan, CFO and Sanjeev Gupta, Export Manager of Cipla received the award from A K Jha, Secretary-Industries and Tourism, Government of Goa and A V Palekar, MD Goa Industrial Development Corporation.

The year 2004-05 saw a fall in the price of generics, primarily in the US market. Also, the Indian markets were not that lucrative. This coupled with the post-WTO restriction and focus on R&D had a serious impact on the revenue expectations of many Indian pharma and biotech companies. In such a scenario, any company that manages to record an impressive y-o-y growth, or even manages to maintain its performance levels, deserves due recognition. The award for sustained growth tried to analyse the company fundamentals over a period of three years to get an understanding of the company and the direction in which it is heading. The award looked at growth through quantifiable parameters like, sales, exports, market share, EBITDA and market capitalisation.

Cipla, since inception has always focussed on high performance levels. Today the company's actual profit (minus interest and depreciation charges) stands at around Rs 495.78 crore, that is, 21.3 percent, as a percentage of sales. The company appears to believe in steady growth, as there are no sporadic surges in the company financials over the last three years. Total sales have reached around Rs 2327.63 crore in FY 2004-05, from around Rs 1549.79 crore in FY 2002-03, thereby augmenting 50 percent growth over two years. The company's exports have reached 1053.21 crore in FY 2004-05, against Rs 812.28 crore the year earlier. An interesting point to note here is that, while the exports to regulated markets have reduced by almost six percent, exports to unregulated markets have increased by around 36 percent to Rs 724.61 crore in FY 2004-05 from Rs 463 crore in FY 2003-04. It remains to be seen if the unregulated markets will receive the same thrust by the company in the coming years. On the market cap front, this goliath has around Rs 7640.69 crore of market cap in FY 2004-05, a steady increase from Rs 7016.47 crore and Rs 4284.72 crore, in the previous years. This signifies heightened level of investor interest in the company.

MUMBAI: The US Food and Drug Administration has tentatively approved Indian drug maker Cipla Ltd's oral form of anti-AIDS generic efavirenz, the US regulator said on its web site.

Efavirenz is an anti-viral that is used with other AIDS combinations to help block the spread of HIV, the virus that causes AIDS.

Drug maker Cipla Ltd has received tentative approval from the US Food and Drug Administration for generic AIDS drug nevirapine in the tablet form, according to an FDA statement. Also, Sun Pharma Ltd has received tentative approval for ondansetron in the injection form.

Ondansetron, used for prevention of nausea and vomiting caused by chemotherapy or radiation therapy, is the generic equivalent of GlaxoSmithKline's Zofran injection.

Cipla has opposed the patent application on Oseltamivir, a drug that became popular at the peak of the bird-flu epidemic. The pre-grant opposition was filed at the Patent Office in New Delhi earlier this month.

Oseltamivir was developed by Gilead Sciences and is sold globally by Roche under the Tamiflu brand name. It is much sought after by Governments across the world as they stockpile the drug in the event of bird-flu jumping species from birds to humans.

Cipla's Joint Managing Director, Mr Amar Lulla, told Business Line that the pre-grant application had been "filed on the grounds of known prior-art, invalid claim, lack of novelty and inventive step".

Prior-art is when knowledge on the drug already exists before the cut-off date — of 1995, in this case — and, hence, a patent cannot be claimed, explained an expert on Intellectual Property (IP). There is already another pre-grant opposition on Oseltamivir, filed by Meditab Specialities. A pre-grant opposition allows people to contest a patent application filed by a company at the Patent Office.

On hearing the patent-holder and the opposition, the Patent Office eventually grants or rejects the drug firm's application for a patent.

The Indian Patent Office had rejected Novartis' claim for a patent on imatinib mesylate, its cancer drug sold under the brand name Gleevec.

An even-handed growth in both the domestic and export market has helped Cipla Ltd post an 80.68 per cent growth in net profit for the fourth quarter ended March 31, 2006.

The company has posted a net profit of Rs 190 crore, up from Rs 105 crore in the same quarter the previous yearTotal income (net of excise) has increased to Rs 917 crore (Rs 550 crore). Mr Amar Lulla, Cipla's Joint Managing Director, told Business Line that the domestic market grew by about 56 per cent, while exports rose about 63 per cent.

The company has posted a net profit of Rs 600 crore for the year ended March 31, 2006, compared to Rs 409 crore the previous year. Total income (net of excise) has increased to Rs 3,116 crore (Rs 2,336 crore). Cipla's shareswere down 4.73 per cent at Rs 247.70 on the Bombay Stock Exchange on Tuesday.

Cipla has posted 80.68 per cent increase in net profit to Rs 190.77 crore for the quarter ended March 2006 as compared with Rs 105.58 crore recorded in the corresponding quarter last year.

Total income has increased by 66 per cent to Rs 917.35 from Rs 550.43 crore in the year-ago period.

For the full year ended March 2006, the company growth of 46.50 per cent in net profit at Rs 600.08 crore as compared with Rs 409.61 crore last year.

Total income during the year increased 33.39 per cent to Rs 3,116.82 crore for the year from Rs 2,336.48 crore last year.

During the year, the company had raised approximately $170 million through issue of 1,10,46,310 global depository receipts (GDRs). Each GDR was priced at $15.39 and represents one underlying share and will be listed on the Luxembourg Stock Exchange. The GDRs were placed through a book building exercise.

Cipla had in February this year announced an issue of bonus shares to the shareholders in the ratio of three bonus shares for every two existing equity shares.

With a sales growth of almost 63 per cent y-o-y in the March 2006 quarter, Cipla’s fourth quarter performance has exceeded most analysts’
expectations.

The company has leveraged the partnership model in foreign markets, coupled with a broad pick-up in domestic sales.

As a result, the stock has outperformed the broader market - in the past three months Cipla has appreciated 42 per cent compared with the Sensex gaining 20 per cent.

In the domestic market, sales expanded an impressive 56.4 per cent y-o-y thanks to an improvement in most product segments and a low base effect in the previous year.

Meanwhile, in the export market, API sales jumped 190.3 per cent y-o-y in the last quarter. However, API sales are typically lower margin, say analysts.

The higher margin formulation exports grew at a comparatively slower 30 per cent y-o-y in the last quarter. Improved export performance was driven mainly by improved performance in segments such as anti-retrovirals, anti-malarials and anti-asthmatics.

As a result, operating profit grew 31.71 per cent to Rs 180.3 crore in the last quarter, sharply lower than the sales growth. Also, its adjusted raw material cost went up by 806 basis points last quarter.

The Cipla stock fell 4.5 per cent on Tuesday, given the broad sell-off on the street. But at the bottom line level, the story was different.
Owing to an almost 75 per cent fall in tax provisioning, net profit went up by 80.7 per cent to Rs 190.77 crore.

Higher contributions from Goa and Baddi plants and increased formulations exports from EOU plants have resulted in the lower tax outgo. After assuming an EPS growth of 20 per cent, the stock trades at about 25 times FY07 earnings, which is high.

Pursuant to the notice dated 11 th February, 2006 , the Company had sought approval of members through postal ballot on various items as mentioned in the said notice. Upon submission of report by the Scrutinizer, members of the Company have approved today i.e. 21 st March 2006 the following resolutions through postal ballot by requisite majority:

1.	Ordinary Resolution for increase in the Authorised Share Capital of the Company.
2.	Ordinary Resolution for alteration in the Memorandum of Association of the Company.
3.	Special Resolution for alteration in the Articles of Association of the Company.
4.	Ordinary Resolution for issue of Bonus Shares.
5.	Special Resolution for further issue of securities in the domestic and/or international market.
6.	Special Resolution for increasing the limit of investment by Foreign Institutional Investors (FIIs).
7.	Ordinary Resolution for Re-appointment of Mr. Amar Lulla as the Joint Managing Director.
8.	Ordinary Resolution for enhancement of borrowing limits.

Cipla dispatched the first batch of 10,000 packs of its avian flu drug on Thursday. The
company plans to supply one-lakh packs of the generic version of Tamiflu in a week’s
time, Amar Lula, joint managing director of Cipla, said.

Tamiflu, patented by Swiss major Roche, is the most effective treatment for avian
influenza. “We haven’t received any order from government as yet banning retail
marketing of the avian influenza drug. All we read was in newspapers. But we do not
want to cross the government line, and plan to supply the drug to hospitals and
organisations only,” he added.

Mumbai-based pharmaceutical company Cipla has decided to make Zanamivir, the one drug other than Oseltamivir known to be effective in treating avian influenza, even as the government is ready to float a fresh tender tomorrow to procure Oseltamivir.

The fresh tender will add 50,000 dosages to the stock of 100,000 dosages already procured.

Zanamivir is currently manufactured and commercialised by GlaxoSmithKline (GSK) the world over as Relenza.

“We are working on the active pharmaceutical ingredient (API) for Zanamivir and are about to apply for marketing approval. The process can take a couple of months,” Cipla's Joint Managing Director Amar Lulla told Business Standard. Cipla is already manufacturing Oseltamivir, while Ranbaxy is soon following suit.

So far, the government has only procured from Hyderabad-based Hetero Drugs and Swiss pharma company Roche, which has the patents on Oseltamivir and sells it under the brand Tamiflu.

“We will buy it from any good company,” Health Secretary P K Hota said, adding that no retailing of Oseltamivir would be allowed as it was a prescription drug, not advisable for paediatric indications.

Zanamivir was discovered by Biota Holdings and licensed to GSK, which received the Drug Controller General of India's permission to import a week ago. Once the manufacturing facility is registered, GSK can sell the drug in India.

“Although we are ramping up capacity in our European manufacturing facility, the demand may outstrip supply in the short term,” said a GSK spokesperson.

However, on licensing of the drug, he said the international management will decide that.

The department of animal husbandry has pegged the culling compensation at Rs 40 per kg for every broiler chicken and Rs 10 for chicks.

So far, 26,000 birds have been culled in Gujarat, with as many due tonight, and 70,000 in Maharashtra, where the operation is more or less complete.

Cipla's stock closed the day at Rs 542.15, 2.45 per cent higher than yesterday. However, poultry major Venky's (India) slipped 6.74 per cent to close at Rs 144.55.

Indian pharmaceutical companies are gearing up for supply of drugs to contain the avian flu outbreak in the country.

With the first suspected flu death and eight cases under watch, the demand for the flu drugs is likely to go up significantly. However, no case of human infection has yet been confirmed by the either the Centre or any state government.

Domestic pharma majors Cipla and Ranbaxy have confirmed that they will produce the flu drug oseltamivir (better known by Tamiflu – innovator Roche’s brand). The Hyderabad-based Hetero Drugs have already supplied several doses of the pill to the government.

Roche’s Tamiflu and GlaxoSmithKline’s Relenza are the only two drugs effective against the H5N1 strain, responsible for the current outbreak of avian flu or bird flu. Neither is available in India now.

Late last week, Cipla announced that it has successfully launched Antiflu, a generic version of the drug. “We have received approval from the Drug Controller General of India to market the drug locally.

We plan to sell the product in other countries too,” the company said. Company chairman Dr Yusuf Hamied has reportedly said that the drug is ready for marketing and will be available in chemist shops next week.

Cipla is equipped to supply one-lakh doses a week, at a wholesale price of around Rs 650. The consumer will have to pay around Rs 1,000.

Ramesh Adige, executive director of Ranbaxy, said that the company is in touch with the government and is gearing up for emergency.

NEW DELHI, MUMBAI, FEBRUARY 18 India has a stock of 7.5 lakh doses of Oseltamivir drugs to combat avian flu — enough to treat 75,000 people. After today’s reports confirming the disease in chicken samples, an additional order has been placed for 2.5 lakh doses. While Hetero Drugs has been licenced by the government of India for manufacturing, other companies claim they are ready and waiting to face the needs.

While Roche is the original Swiss patent holder, Cipla and Ranbaxy have made copies of the original and have got orders from countries where the patent regime is no so water-tight.

With the list of countries where cases are being reported is growing every week, orders are flowing in for all these companies. A company like Ranbaxy that is not ready for the next 3-4 months has got orders from 15 countries in its bag.

To administer it as a precautionary drug—it may result in the virus developing resistance.

With the first cases of bird flu in poultry, the government is not taking chances now: Hetero Drugs said it has got an order from the Government for an additional two lakh capsules. ‘‘We will deliver another two lakh capsules in the next three-four days,’’ director Hetero Drugs, Srinivas Reddy said in Hyderabad.

Reddy said the company has active pharmaceutical ingredient (API) of the drug equivalent of one million capsules in stock. ‘‘It would need seven days for the API to be made into capsules,’’ he said. The company had supplied the medicine to the government at a rate of Rs 710 per strip of 10 capsules.

Ranbaxy says it can only supply it ‘‘in the second half of the year’’. The toxicity and bioequivalence tests are on before which they cannot start bulk manufacture.

Chairman of Cipla Dr Yusuf Hamied today said he had been warning the government about the dangers of bird flu but the government response has been lukewarm. ‘‘It’s a shame... we kept warning (about this) but no one listened to us,” he said. ‘‘We are ready to supply the drugs by next week... but no one from the government show any interest in the drug,’’ the 67-year old Dr Hamied said.

There was a discussion then whether India should, in “national interest”, break the patent regime and not sign on World Trade Organisation agreements which makes it mandatory for any government to first declare a ‘‘national emergency’’ on medical ground, get it ratified with WTO and then allow Indian companies to make the medicine.

However, being signatory to TRIPPS, it has to follow the patent rules. When the world was waking up to the risk of bird flu last October, Cipla had decided to break Roche’s patent on its own and make the drug for India and for exporting it to those 49 countries where the patent for this drug has not been granted to Roche.

Roche had earlier said that it can export the drug to India only by April 2006. The Swiss firm which sells Oseltamavir under the brand name Tamiflu granted a license to Ranbaxy. Cipla last week even bagged an export order and is selling the drug at Rs 1,000 for 10 capsules.