Caraco, Sun Pharma sign R&D pact for 25 new generic drugs
By Caraco reported a record | 09 Dec 2002
Mumbai: The US-based Caraco Pharmaceutical Laboratories has signed a research and development (R&D) agreement for the development and filing of up to 25 new generic drugs with Sun Pharma Global Inc, a wholly-owned subsidiary of Sun Pharmaceutical Industries (SPIL). SPIL has a 46-per cent shareholding in Caraco.
The key purpose of the new agreement is to provide for direct transfer of R&D-based intellectual property in the form of drug technologies to Caraco in order to quickly and efficiently expand Caraco's product line.
According to the terms of the agreement, Sun Global will provide up to 25 new dossier drugs to Caraco over a five-year period. In return, Sun Global will receive 544,000 shares of newly created, preferred stocks of Caraco for each new drug transferred.
These preferred shares are convertible after three years on a one-to-one basis as per the Rule 144 Common Shares under the US corporate law. Under the previous agreement with SPIL, Caraco received technology for 11 abbreviated new drug application products from Sun Pharma and has received the US Food and Drug Administration (USFDA) approval for seven of these generic drugs over the past five quarters.
Caraco reported a record third-quarter sale and the company's first-ever net profit. It raised its sales guidance from $16-18 million to $21 million for the calendar year 2002. The company has four drugs pending for FDA approval and expects a USFDA approval to market one of these by the yearend.
Says Caraco Pharmaceutical chief executive officer Narendra N Borkar: “This is decidedly an accretive step for our company and shareholders. The new R&D agreement provides us with the resources and platform to expand our product line, grow sales, and improve our earnings picture.“