Piramal Life Sciences Limited (PLSL) is an independent research driven drug company that was recently demerged from Piramal Healthcare Limited (Formerly know as Nicholas Piramal India Limited). PLSL was formerly the R&D division of NPIL. PLSL has state-of-the-art R&D laboratories built over 200,000 square-feet of space in Mumbai, India and over 300 scientists engaged in drug discovery and development.
The company, as expected remains in the red and in Q2FY10, the net loss has only increased. For Q2FY01, the company reported a net loss of Rs.31.47 crore v/s Rs.28.12 crore in Q1FY10 and loss of Rs.26.31 crore in Q2FY09. The only good part about the loss is that it does not have to pay income tax!
Despite the loss, the stock price has moved up sharply and this was mainly on account of the rise in revenue at Rs.2.55 crore as against Rs.1.73 crore in Q1FY10. This rise in revenue is very much in line what was expected since the first quarter. Right now, all that is happening in the company is development and no product is yet being sold commercially, so there arises no question of any major surge in income as such.
The company is focused on four therapeutic areas - cancer, diabetes, inflammation and infectious diseases. It currently has a pipeline of fourteen compounds. In cancer, it has three products that are in three Phase-II trials. In inflammation, three products are in Phase-II. In diabetes, the drugs are all in Phase-I and in infection, it has three Phase-II drugs.
Medical R&D is stated to be the ‘next big thing’ for India, given the lower costs on drug development. Compared to the USA or any other developed country, the R&D cost in India is just one-tenth. Hence, in the long run, it would be very good business for R&D units.
PLSL is expected to commercially launch its drug in fiscal 2011-12 and till then, it will continue to remain in losses. But once the drug is out and proves to be successful, it will become a goldmine.
Source: Internet (By S P Tulsian)
The company, as expected remains in the red and in Q2FY10, the net loss has only increased. For Q2FY01, the company reported a net loss of Rs.31.47 crore v/s Rs.28.12 crore in Q1FY10 and loss of Rs.26.31 crore in Q2FY09. The only good part about the loss is that it does not have to pay income tax!
Despite the loss, the stock price has moved up sharply and this was mainly on account of the rise in revenue at Rs.2.55 crore as against Rs.1.73 crore in Q1FY10. This rise in revenue is very much in line what was expected since the first quarter. Right now, all that is happening in the company is development and no product is yet being sold commercially, so there arises no question of any major surge in income as such.
The company is focused on four therapeutic areas - cancer, diabetes, inflammation and infectious diseases. It currently has a pipeline of fourteen compounds. In cancer, it has three products that are in three Phase-II trials. In inflammation, three products are in Phase-II. In diabetes, the drugs are all in Phase-I and in infection, it has three Phase-II drugs.
Medical R&D is stated to be the ‘next big thing’ for India, given the lower costs on drug development. Compared to the USA or any other developed country, the R&D cost in India is just one-tenth. Hence, in the long run, it would be very good business for R&D units.
PLSL is expected to commercially launch its drug in fiscal 2011-12 and till then, it will continue to remain in losses. But once the drug is out and proves to be successful, it will become a goldmine.
Source: Internet (By S P Tulsian)
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