Strides Arcolab strengthens on buzz PE funds eye stake in injectables biz

Strides Arcolab rose 2.46% to Rs 179.35 at 10:57 IST on reports private equity firms Carlyle and 3i were among those holding preliminary discussions to take a minority stake in the drug maker's injectables business.
The stock hit a high of Rs 181.40 and a low of Rs 176 so far during the day. The stock had hit a 52-week high of Rs 182.10 on 7 September 2009 and a 52-week low of Rs 60.65 on 5 March 2009.
The small-cap drug maker has an equity capital of Rs 40.16 crore. Face value per share is Rs 10.
The current price of Rs 179.35 discounts the company's Q1 June 2009 annualised EPS of Rs 60.05, by a PE multiple of 2.98.
According to reports, Strides had recently inducted New York-based financial advisory firm Lazard to bring investors on board for its injectables business, with a valuation of around $170-$200 million.
The Bangalore-based firm manufactures sterile injectables and oral dosage formulations including tablets and soft gel capsules. Injectables that are prepared in a sterile environment where the ingredients are protected against cross contamination are referred to as sterile injectables.
Strides Arcolab recently launched a generic version of Roche's anti-viral Tamiflu, used to treat H1N1 swine flu, for retail sales in pharmacies. Strides has priced its product - Starflu - at Rs 460 for a strip of ten 75-milligram capsules. The retail launch follows the government's approval for restricted retail sale of oseltamivir, the chemical name for the drug.
Strides Arcolab reported a net profit of Rs 60.13 crore in Q2 June 2009 as compared to net loss of Rs 55.96 crore in Q2 June 2008. Net sales rose 9.1% to Rs 175.41 crore in Q2 June 2009 over Q2 June 2008.
Strides Arcolab manufactures a variety of pharmaceutical products that are distributed in over 35 countries. The group's therapeutic portfolio includes steroids, cephalosporins, antibiotics, vitamins, and analgesics. Strides Arcolab also runs a contract research and manufacturing division.
Promoters have pledged 68.96 lakh shares, or 17.22% equity capital of the firm. The total promoter shareholding in the company is 25.80%. (As on 30 June 2009.)