The Chennai drug maker was acquired by Gurugram-based Dhanuka Laboratories under insolvency and bankruptcy process in March 2020 for Rs 1116 crore.
“We have been growing (revenue) around 20% every year since the takeover. So, the additional sales have come without any significant investment by focusing on cost efficiency and improving sales,” Manish Dhanuka, managing director of Orchid Pharma, said in an interview to ET.
“Our first focus was to make the company debt free and fortunately; we succeeded last year. Now we are debt free. We have chalked out multiple pillars of growth,” Dhanuka added.
The company is pursuing backward integration through investment of Rs 600 crore on a new facility in Jammu to manufacture 7ACA (7-aminocephalosporanic acid) with a capacity of 1000 metric tonne per annum under the government’s production linked incentive (PLI) scheme.
“The unit is expected to be commercially operational by the end of FY26, and will aid margins of the company,” he said.7ACA is a key raw material for manufacturing of cephalosporins – a class of life-saving antibiotics closely related to penicillin. India is the major buyer of the key intermediate from China, for both domestic consumption as well as exports – exposing it to risks of supply disruptions and price volatilities. The 7ACA prices have doubled in the last two years, impacting the margins of Indian companies.On the front end, Orchid will be launching a new division called Orchid Antimicrobial Solutions. The division will market generic and novel antibiotic Enmetazobactam to hospitals.
Enmetazobactam was invented in India by Orchid and then outlicensed to Allecra Therapeutics for further development. The drug is approved in the US and Europe, and is under review by the India drug regulator, and the approval is expected in the next three months.
Enmetazobactam, in combination with another antibiotic Cefepime, is used against complicated urinary tract infections, pneumonia, and bacteremia.
“We are working with the DCGI for the approval process (of Enmetazobactam). So, hopefully we should be able to launch it in the next two to three months,” Dhanuka said.
Along with India sales, Orchid is eligible to receive royalties of 6-8% of sales from Allecra.
Dhanuka expects the sales potential of the drug to be around $1 billion in the next 10 years and he is also banking on another novel antibiotic Cefiderocol to treat drug resistant infections.
Orchid has received a sub-license from the Global Antibiotic Research & Development Partnership (GARDP) to manufacture and supply Japanese drug maker Shionogi’s drug to 135 low- and middle-income countries including India.
Orchid is investing around $10-15 million to create a dedicated manufacturing facility for the drug.
“I think with the integration into 7ACA, filing of ANDAs in the US, and direct sales to hospitals in India, our bottom line should definitely improve, and the stability of the company would be much better with less dependence on imports,” Dhanuka said.
“With more profits, we can definitely plough back the money for further growth into other therapeutic categories.”
Dhanuka said the Orchid will be merged with Dhanuka Laboratories within this year.
