To see robust revenue from 2013: Nectar Lifesciences

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To see robust revenue from 2013: Nectar Lifesciences

In an interview to CNBC-TV18, DINESH DUA, chief executive officer of Nectar Lifesciences spoke about the approval it has received from European market.

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In an interview to CNBC-TV18, Dinesh Dua, chief executive officer of Nectar Lifesciences spoke about the approval it has received from Current Good Manufacturing Practices (cGMP) for its Cephalasporin Formulations.

Below is the edited transcript of the interview. Also watch the accompanying video.

Q: Take us through this European Current Good Manufacturing Practices (cGMP) approval for your Himachal Pradesh plant.  What specific opportunity it presents to you for Cephalasporin?

A: This is the result of pains taken over the past two years, when we have been filing for the approval in a very complicated but attractive and lucrative market of European Union. As you rightly said 27 odd countries plus another 10 which give mutual accreditation based on the approval. We have just been approved by Ministry of Health, Hungary for an entry into the European market. This would get us into a very robust revenue stream and an interesting bottomline from 2013 onwards. This sets the stage for us to go for further approvals from various other authorities of regulated markets which is the US and Japan in particular.

Over the last two or three months, it's been in the news that we have been approved for the active pharmaceutical ingredients (API) by US, European Union and Japan recently. So, that puts us in a very enviable position in terms of being most integrated player both in API and formulations going forward. It also helps us to become the lowest cost producer in the world for both oral and the sterile injectible molecules. This has very interesting opportunities in regulated markets which represent atleast about 60% of the global potential for Cephalasporin in the world.

Q: You have got this cGMP approval for the euro zone. Could you tell us how soon would you start supplying over there and what financial benefit we could see in FY13 and thereafter in FY14?

A: As soon as you get approval you don't get into the market. It will take about a year-and-a-half before we start marketing our own brands through partners in European Union. Our strength lies in manufacturing, quality control, quality assurance and regulating. We are on the look out for very aggressive foremost companies in Europe to take us forward into the market.

Q: You received USFDA nod for your plant in Punjab, just take us through whether you have started supplying from that and what sort of upside do you see from the US markets in terms of API manufacture?

A: We are in a very advanced stage of discussions for transferring the concerned source of API to Nectar. It's just been couple of months since we have received the approved. It's a process that takes at least three-four months, or maybe even six months before the formulations company in the US would want to completely transfer it, of course, unless you give a very significant upside in terms of cost arbitrage.

The incentive for switching over to an API would be relatively less. Having said that, the biggest upside is that the moment you get an approval for API, you factor that into your ANDA, which is the formulation, and that's what actually gives you a terrific upside in terms of cost effective formulations. In this regard, we are in discussions with generic behemoths and one or two new era companies to take them through the vertical integrated pathway, which means that API and formulation together can present a very interesting and fascinating proposition for them. That's how we will go forward.

So, now onwards, standalone API would basically not be the recipe for success, it would be an integrated approach, and for that, we are in fairly advanced discussions with a few corporations which have a very interesting proposition out there in the US market.

Q: FY12 is coming to an end, what revenue guidance one can achieve in FY13. What revenue growth we can expect in FY13 from Nectar referring to all the benefits and all the opportunities.

A: Recently we have revised our earlier forecast which I had announced to about Rs 1400 crore. Hopefully if all goes well we should be looking at close to about Rs 1600 crore on the topline for the current financial year. And going forward in FY12-13 we should be looking at close to about Rs 1800-1900 crore on topline.