Chennai: The Chennai-based pharma major, Orchid Chemicals and Pharmaceuticals Ltd. (Orchid) has announced that it proposes to raise up to USD 75 million to fund its long-term growth plans. Orchid's board has considered the issue of foreign currency convertible bonds (FCCBs) in the international markets.

The board has decided to increase the authorised share capital of the company from the present Rs 34 crores (3.4 crore equity shares of Rs 10 each) to Rs 45 crores (4.5 crore equity shares of Rs 10 each).

The board has also considered allotment of 2 million warrants convertible into equity shares to the promoters based on SEBI regulations. This would enable the promoters retain their shareholding percentage even after conversion of the bonds into equity. The warrants will have a lock-in period of 3 years from the date of allotment. Accordingly the company has scheduled an Extraordinary General Meeting on April 10, 2004 to get the approval of its shareholders for the proposals.

The proceeds will be utilised by the company to further diversify and strengthen its foray into the US generics and other regulated markets. Additionally, the company will be establishing new USFDA compliant infrastructure to develop and manufacture drugs in diverse therapeutic groups, with emphasis on non-penicillin, non-cephalosporin products.

Over the last few years, Orchid has initiated a strategic transformation into the more lucrative regulated markets of US and Europe. In line with this strategy, the company has commissioned several new manufacturing blocks and also upgraded existing infrastructure to comply with USFDA and other regulatory standards.

Orchid had earlier implemented an investment strategy involving participation from Schroder Ventures & International Finance Corporation, under which USFDA compliant facilities have been established for cephalosporin bulk drugs and formulations.

According to K Raghavendra Rao, Managing Director, Orchid Chemicals & Pharmaceuticals Ltd. "We have completed the planned investments in the cephalosporin segment and are confident of significant revenues going forward. Exhibit batches for key products have been taken at our new USFDA compliant formulations facility aimed at the regulated markets and we should start filing ANDAs (Abbreviated New Drug Applications) from this month."

Orchid has secured several international regulatory approvals for its oral and sterile cephalosporin products, including two approvals from the USFDA and six Certificates of Suitability (CoS) from the European Directorate for the Quality of Medicines (EDQM). The company expects a quantum jump in performance from 2005, as key cephalosporin products would be going off patent from that year progressively.

The company has already drawn up project plans in this area based on select products, which offer considerable market potential. In addition, Orchid would be utilising part-proceeds to accelerate its drug discovery programs, which have already generated interesting leads, now in advanced pre-clinical evaluation.

Orchid Chemicals & Pharmaceuticals Ltd. is a leading pharmaceutical company headquartered in Chennai, India and is involved in the manufacture of cephalosporin and non-cephalosporin bulk actives, formulations and nutraceuticals. With exports spanning more than 75 countries, Orchid is the largest manufacturer-exporter of cephalosporin bulk actives in India and is ranked amongst the top five cephalosporin producers in the world.

Orchid is one of the few pharmaceutical companies of its size and scale to have received the ISO 9001:2000, ISO 14001 and OHSAS 18001 certifications for its world-class quality, environmental management and operational safety systems.