Expect to beat earning growth for 2007: Panacea Biotec

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Expect to beat earning growth for 2007: Panacea Biotec

Rajesh Jain, Joint Managing Director at Panacea Biotec expects to beat the earnings growth expectation for 2007.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » RELATED NEWS Panacea inks measles drug deal with Indonesia SQL Star in pact with Chiron Panacea Vaccines ALSO READ See latest News about Novartis India See previous management interviews See what other Experts & Brokerages are saying about Novartis India Novartis India BSE | NSE 01/01/70 Are Mutual Funds betting on Novartis India? Other Stocks in this news Panacea Biotec |

Rajesh Jain, Joint Managing Director at Panacea Biotec expects to beat the earnings growth expectation for 2007. 

Panacea Biotec has just received a pre-qualification approval for its Hepatitis B vaccine from the WHO. They launched Hepatitis B vaccine in India through a joint venture with Chiron, he adds.

Panacea Biotec is looking at an annual capacity for Hepatitis B vaccine to be around 40 million doses every year, he further adds.

Excerpts from CNBC-TV18's exclusive interview with Rajesh Jain:

Q: Take us through the kind of benefit this approval can bring to you? We do understand that the volumes might see a spurt but how much of an impact could this have on your margin?

A: Hepatitis B vaccine has become a very important component of combination vaccine strategy that we are pursuing. Pre-qualification of Hepatitis B vaccine is the first step to launch these combination vaccines. We launched this in India through our joint venture with Chiron. I personally feel that this particular vaccine has a huge potential.

Q: It says USD 270 million in 2007, USD 390 million in 2008 and by 2009 we are looking at USD 1 billion, how much of this you hope Panacea will be able to garner?

A: As a company, I would love to complete the target. I think, UNICEF globally are facing a monopoly situation wherein there is only one company, which supplies them and they are looking for new suppliers and that is the slot that Panacea Biotec would want to take. In the domestic market, for example, we are already capturing more than 20% market share in the very first year of our operation, so that gives us the motivation that the brand is growing. 

Even in international private markets as well as institutional market, we are expected to do very well because we will be the second brand.

Q: The WHO margins typically for orders are very thin, and how soon do you hope to be able to garner these? If you can able to give us an idea by FY07, what is the volume of orders and the margins that you would get?

A: We are looking at an annual capacity for Hepatitis B vaccine to be used in its various combination, which is around 40 million doses every year. So we are looking at that kind of volume starting from 2007 to 2009 including the private market. So that should give the Panacea Biotec a huge performance in the coming years.

Q:  Chiron has been bought over by Novartis, in the light of that development, do you think that there would be a change in the format of the joint venture, how is it now proceeding?

A: What we are expecting is possibly a co-operation on a larger scale, which obviously both the companies have to work together. The basic objective for Novartis is to bring Chiron on a global scale in the vaccine market using their financial and knowledge capabilities that Novartis as a big company has.

Strategically, Panacea Biotec would fit into that structure because we have a technology platform, production capability and a rich pipeline of products. So for any bigger scale that you want Chiron to be positioned, for that matter any international company would look at Panacea Biotec. So we feel that any company can come and collaborate with us, so we look at the Novartis with a very big entrust.

Q: What can we expect from FY07 full year from you because for the first quarter your vaccine saw a growth of about 57% and on the tax front also the market expects substantial savings now that you have a plant in Baddi, Himachal Pradesh?

A: I am sure that we will be beating our growth rate that we saw last year including the PAT. But I cannot give you any specific guidance because as a company we don't do that. But I am very sure and confident that we will be able to beat all our projections that we had last year.