Shilpa Medicare up 10%, awaits USFDA nod for Raichur units

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Moneycontrol Bureau

Investors lapped up more shares of Shilpa Medicare on Wednesday after the US Food and Drug Administration (USFDA) has inspected 2 manufacturing units at Raichur. The stock hit a life high of Rs 1,018.50, up 10 percent intraday (in addition to 17 percent rally in previous session).

"USFDA auditors have inspected two manufacturing facilities of the company in Raichur (Karnataka), which are 4-A, Deosugur Industrial Area, Deosugur and 100 percent EOU, 33-33-A, 40-47, Raichur Industrial Growth Centre, Wadloor Road, Chicksugur Cross, Chicksugur," says the company in its filing to the exchange.

Result of the audit is awaited, it adds.

Shilpa Medicare has the largest API facility for oncology currently in India, which has been approved by European Union, Japan and Mexico authorities. Now the company is seeking approval from the USFDA for these facilities, for which USFDA auditors conducted inspection last week.

The company already filed 15-16 ANDAs with partners for the US markets.

Vishnukant Bhutada, Managing Director of Shilpa Medicare says the company has 10 ANDAs filed for the US for formulations & injectibles. He sees oncology as a huge opportunity for them in the US.

In FY14, exports contributed around 80-90 percent of total revenue and domestic business 10 percent while there has not been any contribution from the US.

Analysts believe the USFDA clearance for its API facility at Raichur could multiply oncology APIs sales (which contributed 35 percent to total revenue).

Shilpa’s main focus is the development and manufacturing of high potency oncology APIs. This had fetched a revenue of Rs 200 crore in FY14. It has a broad portfolio of over 25 oncology APIs (with 17 ready drug master files for the US and 9 for the European markets). However, currently, around 80 percent of these oncology APIs are supplied to Europe because its Raichur-based units haven’t got USFDA approval yet.

At 11:53 hours IST, the scrip of Shilpa Medicare was quoting at Rs 983, up Rs 57.75, or 6.24 percent on the BSE.

Posted by Sunil Shankar Matkar