Carbogen buyout to help Dishman boost US sales

AHMEDABAD: Revenues from the US will see a quantum jump to over 40% of consolidated sales of Dishman Pharmaceuticals & Chemicals this year from around 10% last year. Of the Rs 650-crore turnover targeted for 2006-07, about Rs 275 crore will come from clients in the US.

“In the past, Dishman’s revenues have been highly skewed in favour of Europe. In spite of the US being the world’s largest pharma market, our presence there has been very small. But from this year onwards, there will be a drastic change due to the recent acquisition of Carbogen Amcis and the Ahmedabad facility getting US FDA site approval,” says JR Vyas, managing director, Dishman Pharma.

Dishman’s existing businesses are expected to post revenues of Rs 350 crore in 2006-07, out of which only 10% will be from the US. The Switzerland-based wholly-owned subsidiary Carbogen Amcis AG is going to contribute another Rs 300 crore this year. Nearly 80% of Carbogen’s turnover will come from the US, while the rest will be from European clients.

Carbogen and Amcis, which were two different companies, have now been merged into one entity. This company already has a strong marketing network in the US and Amcis has a US FDA-approved plant in Switzerland. “We will take some help initially from Carbogen, but Dishman will also expand its own workforce in the US so as to generate business for its Indian operations.

The Swiss subsidiary will focus on the higher-end business, while mid and lower-end contract research and manufacturing (CRAM) projects will be outsourced to the US FDA-approved plant in Ahmedabad,” says Mr Vyas. Dishman has invested an additional $8 million in Carbogen to expand capacities. This would lead to additional annual revenues of $50 million in 2-3 years’ time.

While Carbogen Amcis do CRAM up to the phase-3 level, its existing clients can undertake further processing at Dishman’s Indian facilities which are much bigger. The Swiss subsidiary’s largest reactor can process 300 litres of drugs, while Dishman’s Indian operation’s smallest reactor is of this size.