Shasun Chemicals to lease a lab in USA

30 May 2007

Chennai: As a strategy to further grow its contract research and manufacturing services (CRAMS) business, Chennai-based Shasun Chemicals and Drugs Limited has identified a synthetic wet lab in the US to take it on long lease.

According to whole time director Vimal Kumar, small drug innovator companies would like to outsource even the lab activities. And for them a lab in US will be much more comfortable.

For Shasun group a lab in the US will complement its wholly owned subsidiary Shasun Pharma Solutions Limited activities in UK. It may be recalled Shasun Chemicals acquired the French company Rhodia''s two custom synthesis and contract manufacturing plants in the UK in 2006 for €1 million, that also included stock of raw material worth €13 million, through Shasun Pharma Solutions. However Shasun Chemicals did not acquire Rhodia''s lab in the US. (See: Shasun Chemicals: Smooth integration of maiden acquisition)

According to N Govindarajan, CEO and managing director, Shasun Chemicals, normally synthetic wet labs will first develop new drug molecules in very small scale (50 / 10 gram level) and then will scale it up to the next stage-kilogram level. "When the results are satisfactory the product will be made at the pilot plant level and finally reach the commercial scale level."

Taking a lab on lease works out cheaper compared to setting up a new lab or acquiring one. "The cost of acquisition would work out between $2 - 4 millon whereas setting up a new lab would require an investment of $5 million. On the other hand lease cost will be $1 million."

During the first year of the lab operations there will not be any great jump in the revenues but there will be an increase in the company''s research product portfolio.