At similar valuations why should we not look at Torrent Pharma, which has much better financials, is a more integrated pharma company (New drugs, domestic, formulations, exports and CRAMS) and has similar growth prospects. Last 3 years EPS for Torrent has grown at 33%.

I think RJ also has stake in the company.

Both Strides and Orchid were in investment phase
they were small companies and invested a lot in research and manufacturing facilities
now is the time when their investments should start working for them
ROE for both the companies would expand in next 5 years

Originally posted by bsk0404 their history is complicated in respect of creating the wealth towards shareholders. results are always unpredictable. i was tracking the results for 5 years and most of the time there were surprises. at this price mostly all positives are priced in. if some one has view on orchid the tell me because orchid has many assets which might make it lupin

http://www.thehindubusinessline.com/2010/12/31/stories/2010123151580200.htm

Pfizer buys Strides' US line-up of 22 drugs for $28 m

Our Bureau

Bangalore, Dec. 30

The pharma industry calls its US market applications ANDAs. Now, 22 such ANDAs or ‘golden eggs' nurtured by Strides Arcolab have hatched into a $28.2- million-plus (Rs 126-crore-plus) nugget for the Bangalore-based drug maker, thanks to the warmth from the large generics market appetite of Pfizer, the world's top drug company.

Pfizer, in a first with an Indian company, has bought 22 of Strides' ANDAs (Abbreviated New Drug Applications). They include 16 approved and six pending filings for sale of off-patent steriles and injections – said to be among the top on Pfizer's list.

The bonus

Strides on Thursday said the deal unlocked the entire portfolio of anti-bacterial and anti-infective injections built up for sales in the US by its marketing venture, Akorn-Strides LLC.

Strides' Rs 10 shares were up marginally to close at Rs 443.30 on the NSE.



The ANDA deal apart, Strides has inked a long-term agreement of undisclosed value with the US major to manufacture and supply the medicine (which then will be sold in the US as Pfizer brands.)

ANDAs are filings that pharma companies make with the US FDA seeking its approval to sell their drugs in that country, the largest drug consumer at $6 billion annual drug sales.

Strides said it “will be entitled to $28.2 million (around Rs 126 crore) in cash as its share of the consideration in addition to entering into supply agreement with Pfizer for manufacture and supply of these products.” The overall deal with the joint venture was for over $63 million.

Mr Arun Kumar, Executive Vice-Chairman and Group CEO of Strides, said, “The divestiture of these products has created significant value for the two joint venture partners. This transaction will further strengthen the strategic partnership between Strides and Pfizer.”

Four of the 22 products are selling in the US. “Akorn-Strides will continue to manufacture and distribute a limited number of the approved products until April 30, 2011,” the company said.

The drugs are part of Strides' 140-odd ANDA filings in the US, of which 53 have been cleared for sales. It has filed 26 through another US company, Sagent Pharma, of which 12 are approved. The rest are through other partners.

Returns significant

Mr T.S. Rangan, Strides Group CFO, told Business Line the returns were significant as the company had invested $2 million while forming the 50:50 venture in 2004 with Akorn Inc. It was to be a vehicle to take its small molecules, mainly steriles or injections, into the US.

Mr Rangan estimated the total US market for the 22 drugs in the range of $550-700 million and said Pfizer could be expected to create a significant volume of sales, thereby driving the production and supply of drugs back home, too.

The portfolio sale to Pfizer would show up in the company's balance sheet for the year-ending December; the money from the manufacturing contract will accrue when the supply was made. The cash would be used to reduce debt. The future of the joint venture would be decided after about three months.

Strides also opened the year with a Pfizer deal, striking a licensed sale arrangement for over 40 patent-expired injectable cancer drugs in January and later expanding the pact to six more countries. A $100-million licensing harvest is on the cards for the group that closed 2009 with turnover of Rs 1,330 crore.