Piramal Life Science – Progressing in Research of New Drugs

Results of Piramal Life Sciences

(in Cr.)
Jun-11
Mar-11
FY10-11
Revenue
0.63
0.69
15.9
Net Profit
-44.71
-40.97
-142.98
EPS
-17.4
-16.1
-56.2
Cash EPS
-16.09
-14.97
-51.73
OPM %
-4574.6
-3817.39
-585.53
NPM %
-7096.83
-5937.68
-899.25
 
 
 
 

Share price movement of Piramal Life Sciences

 
 
 
 
Weekly H/L
95.45
/
90.6
Monthly H/L
96.75
/
85.8
52 Weeks H/L
175.9
/
73.5
 
( 15 Oct 10 )
 
( 10 Feb 11 )
Delivery / Var+ELM %
71.25
/
12.5
Ex Date
29-Jul-11
 
 
 
 
 
 

Piramal Life Sciences

Share price movement of Piramal Life Sciences in Indian stock markets
Share price movement of Piramal Life Sciences in Indian stock markets | Source
Piramal Life Sciences is engaged in discovering new drugs
Piramal Life Sciences is engaged in discovering new drugs | Source

Piramal Life Sciences engaged in new drugs research


New Chemical Entity division will merge with parent company

There is almost no activity taking place in the company Piramal Life Sciences except research, research and more research. The Piramal group flagship company Piramal Healthcare sold its cream of business namely generic pharma division to Abbott Laboratories for around Rs.17000 crore last September. Since then, Piramal Healthcare is also undergoing a lean phase with diminished activity. Now a move made by Ajay Piramal will shrink Piramal Life Sciences further to almost no consequence. The company’s NCE (New Chemical Entity) division will become a part of Piramal Healthcare now. NCE is responsible for discovering new drugs. The shareholders of Piramal Life Sciences, as part of the deal, will get one share of Piramal Healthcare of face value Rs.2 for every four shares held in Piramal Life Sciences of face value Rs.10. The shares of Piramal Life Sciences are traded in the Indian stock markets at Rs.92 now (05.11.11). The shares of Piramal Healthcare are traded at Rs.340 now.

Loss making company

Compared to the paid up capital of Rs.25.45 crore, the sales turnover of Piramal Life Sciences amounting to Rs.15.90 crore is quite small. It is also a loss making company and has incurred substantial losses over the four years period in which it was in operation. The company was started in 2007 when its parent company Nicholas Piramal India Ltd hived off its research division and spun it into a separate company called Piramal Life Sciences. Nicholas Piramal India’s shareholders were awarded one share of Piramal Life Sciences for every 10 shares they held in the parent company. But one cannot criticise the company based on the losses alone. Research activity is a risky one and that too in pharmaceutical industry. One should wait patiently for the discovery of a new molecule. The company is undertaking 24 research programmes at present. Some are in Phase I and some in Phase II clinical trials.

Collaborative Research

Piramal Life Sciences has collaboration with Eli Lilly & Company. It has received a sum of Rs.13.5 crore towards milestone payment. When the research finally succeeds, Piramal Life Sciences will receive royalty payments and will share marketing rights for the discovered drug. Piramal Life Sciences has obtained 77 global patents granted for its chemical molecules. Even if one or two of these find a way into international pharmaceutical market, the company’s fortunes will soar high. In fact one molecule CarGel is in the final stages of completion and will be marketed in the European countries next year. The company has applied for regulatory permissions with the British regulators. CarGel is useful for arthritis treatment.

Frenetic activity in stock markets for two days

The share price of Piramal Life Sciences rose by 35% in 2 days on rumours of merger and new deal. Some analysts believed that Piramal Life Sciences could have bagged a new research deal. Some other analysts believed that a possible increase in the stake by one of the promoters of Piramal Life Sciences, Paramount Pharma, could be another reason that pushed the price of the share sky high.

Progress in discovery of drugs against four diseases

Piramal Life Sciences entered into a drug discovery partnership with Department of Biotechnology to discover new drugs from bio-diverse habitats three years back. Now the project has entered into its Phase II stage. Piramal Life Sciences discovered about 14000 bio-active cultures from the bio-habitats across India in collaboration with 9 national institutes of repute. In the Phase II stage, the company will be identifying and characterising the chemical entity that is responsible for the bio activity in the extracts. As the company possesses high-end facilities and platforms in chemistry and biology, it was rapidly able to isolate and identify the molecules. Piramal Life Sciences will evaluate 1000 out of 14000 extracts in the next one and a half years time. This will reveal lead molecules in the extract. The company’s hectic research and hard work has paid dividend in the project. Piramal Life Sciences collected nearly 2.5 lakh microbes and characterised them in the national institutes. The microbial extracts were screened and analysed for biological activities across four different therapeutic areas namely diabetes, cancer, infections diseases and inflammation. Based on the results of these, the company identified 14000 cultures that revealed potent activities in the selected disease portfolio. The company identified 500 extracts for anti-cancer, 5000 extracts for anti-infective, 6000 extracts for anti-diabetes and 2900 extracts for anti-inflammatory properties. The company has created a National Repository along with DBT at NCCS (National Centre for Cell Sciences). Now in the next stage, the company will utilise this database and try to find molecules that can cure the potent diseases.

Adventure to invest in the shares of Piramal Life Sciences

The shares of Piramal Life Sciences are traded in the Indian stock markets at Rs.92 now. At this price, it is a highly risky adventure to invest in the company. Those who believe that the research activities of the company will pay a rich dividend in the long run can acquire the company’s shares. Patience should be the characteristic quality while investing in the shares of research companies. If you want to quickly make money, forget about Piramal Life Sciences.

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