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PRESS RELEASE
Nicholas Piramal to
de-merge its New Chemical Entity (NCE) Research and
Development unit into an independent company
Mumbai, 31 August 2007:
Nicholas Piramal India Limited (“NPIL”) today announced that
its Board of Directors has approved the proposal to de-merge
its New Chemical Entity (NCE) Research Unit into a separate
company.
Since 2003, NPIL has strengthened its efforts on the NCE
research front. The NCE pipeline has expanded from five
compounds in 2002 to thirteen compounds in 2007, out of which
four compounds are in clinical trials.
NPIL’s Investigational New Drug (IND) Application for its lead
molecule P-276 has recently been approved by the USFDA and
clinical trials will soon commence for multiple myeloma– a
devastating type of cancer - in collaboration with Harvard
Medical School and Dana Faber Cancer Centre, USA. The
Company’s R&D capabilities have also been recently validated
by virtue of research collaboration with Eli Lilly for a
metabolic compound of the US-based pharmaceutical Company.
Both companies share risks and rewards in this collaboration.
NPIL expects to have eight compounds in clinical trials by end
of the current financial year. This will result in increased
spend as clinical development costs constitute about 2/3rd of
the total R&D cost of a drug. NPIL wishes to complete
development upto proof-of-concept (end of Phase II) for all
its pipeline compounds and bring to market certain niche
compounds on its own.
The dynamics of NCE R&D are different from NPIL’s branded
formulations or custom manufacturing businesses. Investment in
NCE research calls for sharper research focus, longer time
horizon and higher risk appetite. Keeping in view these
factors, the Board of Directors of the Company has today
approved de-merger of its NCE unit into a separate company in
which NPIL will hold equity capital of Rs. 45.5 million. This
move will also facilitate bringing in strategic or financial
investors in future who may wish to invest directly in the NCE
research program.
Under the de-merger scheme, the NCE Undertaking, with net
assets (at book value) inclusive of unutilized monies
collected under the Rights Issue of 2005 and intended for R&D
to the extent of Rs.950 million, will be transferred from NPIL
to the New Company. In consideration, the New Company will
issue fully paid up equity shares aggregating to Rs.209
million to the shareholders of NPIL in the ratio of 1:10 (i.e.
1 equity share of Rs.10 for every 10 equity shares of Rs.2
each held in NPIL).
Post de-merger, NPIL will hold 18% of the equity capital of
New Company and the remaining 82% will be held by the
shareholders of NPIL. The New Company will be an independent
company. It will be listed on the BSE and NSE. At an
appropriate time after listing, the new Company will explore
various options for raising further funds to meet its business
requirements. This scheme of de-merger is subject to
applicable regulatory and other approvals.
For further information contact:
Notes to editors:
About Nicholas Piramal India Limited: Nicholas Piramal India
Limited ("NPIL") is one of India's largest pharmaceutical
companies with a growth track record of above 30% CAGR since
1988. The Company is currently ranked 4th in the Indian market
with a diverse product portfolio spanning nine therapeutic
areas. NPIL's had consolidated Revenues of US$602 million in
2005-07. The Company has R&D capabilities in Custom Chemical
Synthesis, Process Innovation, NDDS and Basic Research. It has
world-class USFDA-approved API and formulations facilities
without any 483s.
NPIL has a long track record of successful collaboration with
innovator companies. Since 2003, the Company has made
significant investments to become a global custom
manufacturing organisation (“CMO") for large and medium-sized
innovator companies. Nicholas Piramal has a global CMO
footprint across North America, Europe & Asia, and is
committed to respecting Intellectual Property.
NPIL is listed in India on the Bombay Stock Exchange, National
Stock Exchange and Ahmedabad Stock Exchange. For further
information, please mail
investorrelations@nicholaspiramal.co.in
or visit
www.nicholaspiramal.com
.
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