India's Unichem Laboratories is in talks with a few Brazilian drug firms for a $20-25 million acquisition, after it failed to seal a takeover deal there, a top official said, forecasting a faster revenue growth for FY08.
We are in talks with certain companies, Chairman and Managing Director P.A. Mody told Reuters in an interview. If something materializes we will know in 3-6 months.
He declined to name the firms.
In January, Mumbai-based Unichem was close to buying a Brazilian firm with a marketing network and a few product approvals. However, that did not go through, he said citing lack of financial and operational efficiencies from the merger.
The acquisition will be funded through internal accruals, he said.
Unichem also sees consolidated sales for 2007/08 growing by up to 20 percent driven by its domestic business, but the rupee's growing strength against the dollar is a concern, Mody said.
Last year, revenue grew nearly 15 percent to 6.3 billion rupees.
Cardio/diabetology drugs will continue to be our thrust area, Mody said.
In August, Unichem forayed into the skin care segment, which is expected to contribute a mere 60-70 million rupees this year.
Exports will marginally increase but we have already lost about 10 percent realisation in terms of value beacuse of the dollar falling against the rupee, Executive Director B.K. Sharma said. Exports contributed about 23 percent to the total revenue last year.
The Indian rupee has risen more than 11 percent against the dollar this year hurting companies that earn their revenue in dollars.
Unichem's research and development spend would also rise to about 4.5 percent of sales this year as it plans to file five more abbreviated new drug applications with the U.S. regulator, Mody said. Unichem has filed seven ANDAs so far.
Niche Generics, a UK firm that Unichem bought out in December, is expected to post revenue of 13 million pounds in FY08, rising 17 percent over last year, Mody added.
We hope Niche will near breakeven by March 2008, Mody said. The turnaround phase will start after that.
It is expected to turn profitable by 2008/09, he added.
Unichem also plans to invest 1 million pounds to set up a captive packaging unit in Ireland by April to cater to Niche's customers, Mody added.
Shares closed 0.1 percent up at 218.25 rupees in the Mumbai marekt.