Orchid Chemicals & Pharmaceuticals Ltd

Business Background

Orchid Chemicals & Pharmaceuticals Ltd. is an integrated pharmaceutical company
with core competencies in the development and manufacture of Active Pharmaceutical
Ingredients (APIs) and Finished Dosage Forms as well as in drug discovery.
The scientific and technical strengths of the company, particularly in the cephalosporin
injectable space, have strengthened its foot hold in the USA – the largest market in the
world. With the early mover advantage in the anti-infectives segment has provided
long-term exclusive marketing alliances with reputed global companies such as Apotex,
Actavis, Dava, Hospira etc. Having established strong base in US cephalosporin
segment, the company is spreading its wings to other regulated markets like Europe
and Canada. Further the company is progressing well in the non-penicilin, noncephalosporin
(NPNC) and drug discovery front.
Orchid Holds a healthy market in US cephalosporins
injectables

Driven by its early mover advantage and marketing alliances with leading global players,
Orchid has captured healthy market shares in the intensely competitive US market. It
is the sole generic supplier of Cefoxitin and Cefazolin in the USA by capturing market
share of 50% and 85% respectively. Also it maintained its market share over 20% for
products like - Ceftriaxone and Cefprozil. All these products were launched in FY2006.
The healthy market shares achieved by Orchid indicate the strength of Orchid and its
marketing partners in the USA market.
Big Product launches to boost US revenue

Orchid witnessed about 17% growth in its US revenue to Rs283 crore in FY2007,
despite no significant new launches made by the company in the USA during the year.
But the company would see robust growth in the high margin US business, driven by
new product launches like – Cefepime, Cefdinir and Tazobactum + Piperacillin (Tazo-
Pip) during FY08E-FY09E.
During June 2007, the company launched the first generic of Cefepime (with branded
market size of $190 million) in US market and captured 50% market share as it is the
only generic supplier. Subsequently during late July it launched Cefedinir (with branded
market size of $850 million) and there are just 3 generic competitors in the market.
With relatively lesser competition prevailing for the products, the price erosion caused
Orchid is sole generic supplier of
Cefoxitin and Cefazolin in the USA by
capturing market share of 50% and
85% respectively.
Cefepime and Cefedinir would
contribute incremental revenue of
$31.4 million and $37.4 million during
FY08 and FY09 respectively.

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