To Sealing Core Deal
Seven months after it
announced its intent to acquire ailing Ahmedabad based Core
Healthcare's intravenous fluids and medical devices business, FMCG
major Nirma is learnt to be close to be wrapping up the deal for a
little upwards of Rs 300 crore.
For Nirma the
acquisition marks not just a diversification into pharmaceutical
business but also would bring tax benefits by way of accumulation of
depreciation of Core's assets which could run into Rs 200-odd crore,
the sources said.
The FMCG player had
inked an MoU with ARCIL in December 2004 to acquire Core's business.
Core had borrowed Rs 710 crore (principal) in the nineties from 23
banks and financial institutions to fund its ambitious expansion
plans. It had later managed to settle Rs 110 crore worth of
liabilities but around Rs 650 crore (principal) is still outstanding.
Nirma plans to acquire
Core's facility spread over 600 acres, which is learnt to be operating
at around 50 per cent capacity utilisation, and raked in Rs 110 crore
turnover in 2004-05.
Cited as one of the
major homegrown success stories in the mid nineties, Core catapulted
promoter Sushil Handa into the top league of Indian entrepreneurs, but
its rise to a global force in IV fluids was cut short by high cost of
Founded by the Handa
brothers - Sushil and Sunil - in 1985 with an investment of Rs 4.5
crore, Core went for an initial public offer of Rs 36 lakh in 1988 and
second offering of Rs 19 crore in 1992 to fund expansions. It also
issued global depository receipts of around 80 crore in 1994 at the
Luxembourg Stock Exchange.
(Ref : Times of
India dated 9th July 2005)
Maharashtra FDA Wrong In Insisting On US FDA Nod
For Using DES : Bangalore Cardiologists
The decision of the
Maharashtra FDA to insist on US FDA approval for manufacture of drug
eluting stents (DES) and on trade licences from the state drug control
department to market them is illogical. This will only create shortage
of stents, push up prices and create a monopolistic situation in the
market, according to leading cardiologists in Bangalore.
said there was no uniform standard in the country to ascertain the
quality and safety of medical devices, they said there was no logic in
using the US FDA as a yardstick to determine the quality of stents.
"US FDA is no longer
the torchbearer for certifying drugs and medical devices. If all drugs
had to be US FDA certified, then more than 80 per cent of them would
be off the shelves," said Dr. B. G. Muralidhara, chairman and chief
cardiology, Trinity Heart Hospital Private Limited, the largest user
of stents among small private hospitals in Bangalore. On an average,
Trinity the 75-bedded dedicated cardiac care facility in the small
private hospital segment uses between 75 and 100 stents on 60 patients
The two popular stents
used in India are Taxus by Boston Scientific and Cypher by Johnson &
Johnson, which are both approved by US FDA. Though there is little
clinical difference between these stents and those without US FDA
approval, the former cost Rs 50,000 more, making them unaffordable to
most Indian patients. Over 90 per cent of the stents are no US FDA
approved and the impact on healthcare and the stent market will be
serious. The stents also do not justify the high cost since they are
primarily scaffolding devices with the mechanical aspect constituting
95 per cent of their functioning and the clinical components a mere 5
Muralidhara said stents are used for fixing the artery after
angioplasty and cannot be removed. Hence the Maharashtra FDA's
contention that used stents were implanted into patients has no basis.
the Maharashtra FDA decision could be politically motivated and has no
opined that the move will also make it difficult to produce stents of
the right length and diameter. This could force cardiologists to
compromise on the quality of the procedure, averred Dr Muralidhara.
According to Dr Jay
Ranganath, consultant cardiologist and pediatric cardiologist of
Manipal Hospital, the Maharashtra FDA's decision will bring down
non-invasive cardiac procedures by 20 per cent and there will be an
increased number of surgeries like bypass and open heart. Manipal
Hospital uses between 220 and 250 stents a month and is the largest
user in the corporate hospital segment.
(Ref : Chronicle
Pharmabiz dated June 23, 2005)