Jubilant Life Sciences to sell licensed and proprietary diabetes and cardiovascular products

18-Aug-2014

Has seen substantial growth in its domestic Indian market with such products

Indian Custom Research and Manufacturing Services (CRAMS) company Jubilant Life Sciences is likely to market licensed products in the diabetes and cardiovascular therapeutic areas, besides selling its own product range in the same segments.

According to Chairman Shyam S Bhartia these segments have seen substantial growth in the domestic market, compared with other segments.

\'We have recently forayed in the market with a cardiovascular and diabetes product line. We will be selling a combination of both of our own basket of products and licensed products of other companies,\' he said.

The company, which entered the Indian formulations market in the first quarter of the current fiscal year, has set up a cardiovascular diabetic division and entered its domestic market with 34 formulations.

Jubilant is the largest Indian CRAMS player with a vertically integrated business model. It derives around 50% of its sales from CRAMS, spread among various business verticals.

We will be selling a combination of both of our own basket of products and licensed products of other companies

But in its pursuit of building capacity and creating multiple revenue streams, the company\'s debt situation has not improved. As most of the debt had been in US dollars, the sharp INR depreciation over a period of 2–3 years has made it worse.

The company\'s pharmaceuticals business has grown at a compounded annual growth rate (CAGR) of more than 15% between 2010 and 2014, driven by the generics and speciality pharma segment. However, pricing pressure in the drug discovery business and some formulations in the US have put consistent pressure on EBITDA margins.

The company\'s Spokane facility in Washington State, US, has resumed operations after being on an extended shutdown for 10 weeks, while it addressed quality issues raised by the US FDA. It expects the contract manufacturing business of sterile injectables from this unit to come back to normal in the current quarter.

The company is also expecting to launch radiopharma device Ruby-fill in the US and Canada during the Q4, subject to regulatory approvals. The market size for this device is said to be US$70m.

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The company completed the consolidation of its pharmaceutical business under Jubilant Pharma, Singapore, on 1 July, through funding of $147.5m from International Finance Corporations (IFC). Of this, an $87.5m loan is due for repayment after seven years and the remaining $60m is made up of zero coupon convertible bonds with the conversion option after six years. A further loan of $52.5m for five years is to be syndicated by IFC.

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