Ranbaxy takes on GSK's Valtrex in US

Ranbaxy has introduced blockbuster drug Valacyclovir hydrochloride
on November 25, which may net around $200 million in revenues 
during the six-month exclusivity period, as well as prop its bottomline from the fourth quarter this year itself. 

The molecule represents its first major first-to-file (FTF) opportunity since the Daiichi acquisition, and its problems with US Food and Drug Administration last year. Ranbaxy’s generic Valtrex launch is on track, and comes even before GSK’s patent on the drug expires on December 23 this year. 

The company holds a 180-day market exclusivity on the generic version of Valtrex, which was accorded after Ranbaxy and the innovator GSK reached a settlement in 2007. Also, it is the only generic company to market Valtrex, an anti-viral for herpes infection, during the period. (A Para IV FTF opportunity for a company ensures 180-day exclusivity in the market) 

Analysts expect that the company may mop up around $200 million in sales during the six-month period, considering that there may be price erosion once the generic is launched in the market. Total market sales for Valacyclovir tablets stood at $2.2 billion (IMS MAT September, 2009). 

Sources said that USFDA approval for the molecule has been granted to Ranbaxy’s US subsidiary Ranbaxy Pharmaceuticals for the product to be manufactured at Ohm Laboratories. Earlier the company had applied for approval from its domestic facility (possibly Dewas) which is facing an import ban from the FDA. 

Recently Ranbaxy’s CEO and managing director Atul Sobti had told TOI in an interview that the company will protect and monetise its FTF opportunity. 

When contacted a Ranbaxy offical said: “Ranbaxy Pharmaceuticals has introduced Valacyclovir Hydrochloride, 500mg and 1g tablets, having previously been granted US FDA approval for these oral dosage forms. RPI being the first to file and to successfully challenge the Valacyclovir patents, is the first generic pharmaceutical manufacturer entitled to offer an affordable alternative to the brand, Valtrex tablets by GlaxoSmithKline”. 

With the launch, the company may beat its guidance of reporting a huge loss of around Rs 700 crore for the year, analysts said. For the nine-month period ended September 30, the company has already mopped a small profit of $10 million.

How ideologues manipulated masses is unparalleled

The single-minded agenda of the RSS and VHP; and the extremely patient and focused manner in which the handful of ideologues and theologians manipulated the masses and turned them into a frenzied mob, capable of acts of the gravest depravity, is unparalleled.

It is established that the events of and leading up to the 6th of December in the birthplace of the virtuous Lord Ram were tainted by a joint conspiratorial enterprise... Lured by the prospect of power or wealth, a rank of leaders emerged within the BJP, RSS, VHP, Shiv Sena, Bajrang Dal, etc who were neither guided by any ideology nor imbued with any dogma nor restrained by any moral trepidation. These leaders saw the Ayodhya issue as their road to success and sped down this highway mindless of the casualties they scattered about. These leaders were the executioners wielding the sword handed to them by the ideologues.

The role played the chief minister and ministers of Uttar Pradesh and by individuals and organizations in connection with the destruction of the RJBM structure.

The BJP’s claim that it was carrying out the people’s mandate makes it inexplicable why it had to resort to subterfuge in order to effect the destruction of the disputed structure... Kalyan Singh, his ministers and his handpicked bureaucrats created manmade and cataclysmic circumstances which could result in no consequences other than the demolition of the disputed structure and broadened the cleavage between the religious communities resulting in massacres all over the country...The parallel government run by the RSS has also been exposed and analysed in my report. ... Paramhans Ramchander Das, Ashok Singhal, Vinay Katiyar, Vishnu Hari Dalmia, Vamdes, KS Sudarshan, H V Sheshadri, Lalji Tandon, Kalraj Mishra, Govindacharya and others named in my report formed this complete cartel led by Kalyan Singh and supported by the icons of the movement like Advani, Joshi and Vajpayee.

Airtel reduces roaming rates by 60%

Industry analysts feel the cut by the largest mobile service provider will put further pressure on its peers. The tariff war may now spill onto the SMS space as well as other areas like data plans, postpaid schemes, corporate plans and international roaming.

On Friday, Airtel said when a customer, who is on national roaming, makes an STD call to another Airtel number, the charge will be just 60 paise per minute, compared to Rs 1.50 earlier - a cut of 60%. Likewise, while roaming, all incoming calls will now be charged at 60 paise, down 40% from Re 1. The same rate will apply to calls to local Airtel numbers while roaming, but customers will be charged at 80 paise for each call, local as well as STD, to any other network. “Recent research has shown that customers need benefits while travelling and are not satisfied with just local calling benefits”, Bharti Airtel president (Mobile Services) Atul Bindal said in a statement.

In the last few months, most telecom providers, led by Tata DoCoMo and Reliance Communications, have cut roaming rates.

For example, Tata DoCoMo charges 2 paise per second on national roaming, while for RCom it is a flat 50 paise per minute. However, Vodafone Essar, another major player in the sector, is still to cut roaming rates.

About two months after Tata DoCoMo's 1 paise/second plan was launched and the telecom firm started clocking record number of new customers each month, most of its peers responded by offering attractive plans to retain their customers and also to attract new ones. But at the same time, sector analysts have been turning negative on the prospects of the listed telecom firms and investors have been selling these stocks.

A research report by foreign broking house Macquarie noted that the recent tariff action in the telecom sector was mainly concentrated in the prepaid voice space, but it expects further negative risks to telecom companies from tariff cuts in SMS, data plans, postpaid and corporate plans and international roaming.

Sensex falls 22 points on weak global cues

Weak global cues and negative FII activity weighed on market sentiment.

The BSE barometer was quoted lower at 16,763.34 at 1015 hours, down 22.31 points or 0.13 per cent from its last close.

The broader 50-share Nifty of the National Stock Exchange also dropped by 10.50 points or 0.21 per cent to 4,978.50 at 1015 hours from its previous close.

Key stocks such as DLF were down 1.86 per cent, ICICI Bank 1.54 per cent, Reliance Infra 1.52 per cent and SBI 1.16 per cent in early trade.

Yellow metal sizzles to Rs 17k

Over the last one year the yellow metal has risen a whopping 42% in the Mumbai market, rising from about Rs 12,000 level a year ago to its Tuesday close at Rs 17,015. One of the main reasons for the gold's rally is the weakness of the US dollar against other currencies. Interestingly, the BSE sensex is also hovering around the 17K mark now. "There are four main factors that drive gold prices globally and at present three are leading the rally," said Jayant Manglik, president, Religare Commodities. "We expect the current rally to continue for some time. But for the strength of the rupee, by now it could have crossed the Rs 18,000 mark also," Manglik added. For one, globally gold is denominated and traded in US dollar. So any weakness of the dollar against other major currencies like Euro, British Pound and Japanese Yen, makes gold cheaper for people holding those other currencies. Secondly, gold is considered a good hedge against inflation. There are lot of people who believe the current easy money policies of most central banks would lead to inflationary situations. So these people are also betting on gold. The third factor is the low rate of interest in major economies. Since a low interest rate lead to low return if money is kept in the banks, a number of investors, looking for higher returns, prefer to invest in gold. The last major factor that drive gold prices is higher security threat, like war. But currently this factor is not influencing gold prices while the other three are having a combined effect in driving gold prices to newer peaks, market players said.

Essar buys Warid's operation

The combined enterprise value of Warid Telecom Uganda and Warid Telecom Congo is estimated to be $318 million.

According to sources close to the development, the Essar group has acquired 51% equity for about $160 million. Essar investment in Warid Telecom in Africa is part of its strategic plans to grow its businesses in Africa.

The agreements to this effect were on Sunday signed by Sheikh Nahyan Mabarak Al Nahyan on behalf of the Dhabi group and Prashant Ruia, group chief executive, Essar group, in Abu Dhabi.

The Essar Group has committed growth capital to both telecom operations to facilitate network expansion and marketing, a joint statement from Dhabi group and Essar group said. "Upon completion, the Essar group will acquire a majority stake in both the assets. The partnership is also expected to bring operational efficiencies to the African operations", it said.

Commenting on the development Sheikh Nahayan Mabarak Al Nahayan, chairman of Dhabi group, said, "We are pleased to join hands with a group that both complements and extends our synergies to expand further into Africa."

"Warid has expanded its greenfield operations to become credible competitors and challengers in the market where it operates; the time is now right for the next stage of its growth and evolution", Nahayan added.

Ruia said, "This transaction with the Dhabi group augments our successful launch of telecom services in Kenya under the brand 'yu' which was a stepping stone for Essar to expand its telecom footprint to the African continent." This deal is a reflection of Essar's plans to increase its presence in the Middle East and Africa regions as it explores business opportunities.

Satyam scam: SFIO to begin prosecution this month

The government on Monday said the Serious Fraud Investigation Office (SFIO) will begin prosecution into the Satyam scam this month.

"During this month, the SFIO will begin the prosecution on those or those areas of company laws that the SFIO is expected to and have been authorised to proceed with," corporate affairs minister Salman Khurshid told a press conference here.

He said the agency is "dutifully and diligently" pursuing what it is supposed to do in the Satyam case.

The SFIO, an arm of the corporate affairs ministry, had investigated the multi-crore rupee Satyam accounting fraud and submitted its reports to the government detailing violations of company law by founder chairman B Ramalinga Raju and others.

The investigating agency will initiate proceedings on about 30 charges, mostly under the Companies Act of 1956, while the Central Bureau of Investigation (CBI) will be acting on five or six charges involving criminal offences under the penal code, sources said.

The corporate affairs ministry had asked the SFIO to initiate prosecution in the Satyam case after obtaining opinion of the solicitor general, sources said.

Bid to hike CNG price may raise transport cos

Public transport running on CNG (compressed natural gas) in cities such as Delhi and Mumbai as well as power is set to get costlier if the government approves an oil ministry proposal to raise the price of gas under government control by as much as 33%.

Since gas under government control fuels most gas-fired power generation and CNG services, their costs will rise proportionately. Present norms allow power producers to pass on the fuel cost to consumers. The hike in city transport, however, could be moderated by the service providers such as IGL in Delhi and MGL in Mumbai who could absorb part of the increase.

Official sources said the proposal, being prepared for consideration of the cabinet, envisages raising the price of controlled gas from Rs 3,200 per thousand cubic metres ($1.8 per unit) to Rs 4,250 per thousand cubic metres ($2.4 per mBtu) in the first round. Subsequently, it is to be raised to Rs 7,500 per thousand cubic metres ($4.2 per unit) by 2013 in stages.

Government controls the price of gas from fields given to state-run explorers without bidding. Gas from joint venture fields and the quantity bought and marketed by GAIL is market-driven and costs between $4.3 and $5.65 per unit. Next is imported LNG and finally gas from Andhra offshore field of Reliance Industries Ltd.

A ministerial panel had set $4.2 per unit as the price for RIL gas and the Planning Commission wants this to be the benchmark for pricing gas from all domestic sources. The increase in the price of controlled gas is also in line with a 2005 Tariffs Commission recommendation. Prices were last revised in 2005.

State explorers ONGC and Oil India will be the main beneficiaries. ONGC alone could mop up an additional Rs 2,000 crore per year. Producer price for ONGC is proposed at Rs 3,870 per thousand cubic metres from Rs 3,200. The consumer price would be 10% higher. The government too will garner Rs 750 crore more by way of taxes and royalty in the current year. This would rise to Rs 4,500 crore in 2013 when prices are brought at par with RIL's price.

Sources said consumer price for power and fertilizer units outside north-east would be fixed at 10% above the producer price, while for the plants in that region it would be 60% of the price. Consumer price for transport and small consumers outside north-east may be fixed at 20% above the price for power and fertilizer sectors.

AI gets Rs 2000cr lifeline

The cash-strapped Maharaja will not go bankrupt, at least for now. The government on Thursday agreed to inject Rs. 2,000 crore in this fiscal in a phase-wise manner of Rs 400 crore per month, subject to the airline cuts costs and increases revenue. The Pranab Mukherjee-headed Group of Ministers (GoM) met on Thursday and decided to do a monthly review of AI's performance before giving the next tranche of Rs 400 crore.

Without a bailout, the AI-IA combine — that has a monthly cash loss of Rs 400 crore — may not have survived beyond this year. The aviation ministry was eying Rs 5,000 crore and Rs 9,000 crore as equity infusion and aircraft purchase assistance over next three years. But the GoM has for now agreed to recommend to the Union Cabinet phase-wise infusion of fund till March 2010. Future funding will be decided on AI's progress card.

GoM's biggest worry was how deep-in-red AI would fund the Rs 55,000 crore order to acquire 111 new aircraft. The civil aviation ministry pointed out that AI-IA combine's aircraft order size has been halved in value terms.

"Out of the 111 new planes, 50 were wide body aircraft that accounted for over 65% of the total bill. Of these big ones, 27 Boeing 787 Dreamliners are nowhere on radar as they are yet to fly. Delivery of three Boeing 77 have been deferred to 2013 and three of them — already with AI — are being leased out. So, the aircraft order in terms of monetary value has been halved with these 33 twin aisle planes out of the radar," said sources.

Both Mukherjee and Chidamabaram are learnt to have been sceptical of AI's tall claims on revenue and cost fronts. "Employees must know this money has not come easily and focus on cost-cutting has to remain," they are learnt to have told Patel and the AI management. Patel told TOI: "A number of steps will be taken to cut costs by rationalising routes and leasing aircraft. Cutting salaries is not the only way to cut costs and the management must look at all other means very closely. There is no room for complacency as fund infusion is closely linked to achieving success on cost cutting and revenue generation."

The GoM is also learnt to have promised Arvind Jadhav, CMD, certain degree of freedom to take tough decisions without any interference. In a previous GoM, Chidambaram had questioned the accountability of bureaucrats who headed AI in the past and presided over its decline.

"By early January, a number of tough steps will be taken. This will be in terms of cutting loss-making routes and instilling discipline," said highly-placed sources. AI loses Rs 3,000 crore on 30-odd routes alone and most of them could be closed.

AI scraps performance incentives

Air India on Wednesday decided to drastically cut the salaries of its top management — functional and executive directors. The performance-linked incentive (PLI) component of their pay, which accounts for 60% to 80% of the total package, has been completely scrapped for those on board on deputation from the government. The 36 AI-IA directors used to get anywhere between Rs 55,000 and Rs 5.2 lakh as PLI every month.

Airline employees who have made it to the board after years of service will face a huge cut in PLI as this has now been brought within department of public enterprise guidelines under which PLI can't be more than half of the salary. For instance, the ED (operations) has a basic salary of Rs 73,240 with a monthly PLI of Rs 521,425.

Similarly, ED (engineering) has a salary of Rs 76,169 and a monthly PLI of Rs 162,529. Now following Wednesday's board decision — taken amid stiff opposition from directors, PLIs can't be more than half the salary which would mean a knock of almost Rs 4.9 lakh and Rs 1.2 lakh per month for the EDs operation and engineering. The non-technical board members used to get a PLI of under a lakh which would also get slashed.

"Government nominees on board who are ex-officio there don't get any PLI. IAS and IPS officers sent on deputation there like director (vigilance) will henceforth not get any PLI at all. If the CMD happens to be an IAS or IPS posted there, he or she will also not get any PLI," said a top board member.

This move has left directors fuming. "We'll now get less than many of our juniors. Our take-home was under a lakh after deductions and now it will be almost half that amount. The airline could not touch pilots' PLIs as they can ground the airline with a strike," said an angry board member. Another board member said: "The airline's morale has never been lower. People right from top to bottom now wonder if this is being done deliberately to cover up for ministry's mistakes like merger and huge aircraft orders for which we are being made scapegoats," the member said.

Importantly, the move has come just a day before Pranab Mukherjee-headed Group of Ministers (GoM) meets to decide on the issue of funding AI. The ministry is seeking Rs 5,000 crore and Rs 9,000 crore as equity infusion and aircraft purchase assistance from the government over next three years. But the GoM told AI clearly that it had to make progress on wage cut front to get any money.

7 years ban for Pyramid Saimira

Market regulator Sebi on Tuesday banned Pyramid Saimira Theatre Ltd (PSTL) for seven years from accessing capital markets. It charged the company of issuing shares to non-employees under the "employee quota" prior to its IPO in December 2006, who walked away with "unlawful gains". The order, issued by M S Sahoo, wholetime member, Sebi, said, "PSTL aided and abetted the seven persons to corner shares of PSTL under the employee category to the detriment of the common investors". Reacting to the order, P S Saminathan, chairman of PSTL, told The Times of India, "this (the order) is ridiculous and arbitrary decision without any reason. We will definitely appeal against this order."

Birlas to foray into hotel industry

For the first time in their close to 100-year history, the Birlas are entering the hospitality arena. The Birla Group- a part of corporate folklore in the country, along with the Tatas - is going to set up its first hotel on a closed mill plot in Mumbai.

Although the Birla empire - spread across the various family groupings (BK, AVB, KK, CK, SK, Yash and MP Birla groups) - pretty much covers the entire business spectrum, from textiles, metals and cement to automobiles, tea, IT and media, the Birlas had never tried their hand in the hotel arena.

Basant Kumar Birla, the oldest member of the Birla family, told TOI that his group has decided to set up a luxury hotel near Worli, in south Mumbai, on unutilised land belonging to Century Textiles & Industries. "We will not run the hotel. Five big groups from India and abroad have approached us for managing it. We will get a fee, which will be revised every three years," Birla said.

The group may also use the land for commercial real estate, the industry doyen said. "We want to optimise the value of the land belonging to Century Textiles. The value will appreciate if we develop it. We will not sell the land. The company will return 15-20% of the land to the state government, as per rules, and the rest will be developed," he added.

Century Textiles senior president R K Dalmiya said the mill has been shut since 2006. "All the mills in the area are closed for environmental or other reasons. The mill occupies 40 acres, of which we own 30 acres. The balance is lease-hold land for which the group has an existing 999-year lease with the Wadia Group," he said, adding that a Singapore-based architectural firm has been appointed as adviser for the hotel project.

Century Textiles has already set up an advanced greenfield textile mill with an investment of Rs 850 crore at Bharuch in Gujarat. The mill was inaugurated by Gujarat chief minister Narendra Modi in the presence of B K Birla and his grandson Kumar Mangalam Birla (chairman of AV Birla Group) in October. "The new mill alone will take care of most of our requirements," Dalmiya said.

Jet, Kingfisher hike fuel surcharge, SpiceJet too may follow

The hike comes into force with immediate effect, both said. "Effective today, the fuel surcharge levied by Kingfisher Airlines for travel on domestic sector stands revised upward," a Kingfisher Airlines statement said. The fuel surcharge on flights below 1,000 kilometres has been hiked by Rs 100 while for flights above 1,000 kilometres it would be Rs 200, the statement said. A Jet Airways spokesperson said, "We have increased the fuel surcharge by up to Rs 200 on all our domestic flights across Jet Airways, JetLite and Jet Konnect with immediate effect." Budget carrier SpiceJet said that it was mulling a similar hike to partially offset increasing operating costs. "We are contemplating a nominal Rs 100-200 increase to partially offset the recent nine per cent increase in fuel price," SpiceJet's Chief Executive Officer Sanjay Aggarwal said.

After call charges, SMS rates may be next to tumble

Paying 50 paise to Re 1 per SMS, depending on your package? Well, the cost to your mobile service provider of delivering message to another mobile network is less than 1 paisa. That's because an average SMS consists of 1KB data, which takes a fraction of a second for transportation and termination. This revelation not only belies claims that India has among the lowest telecom tariffs in the world, it could also set the stage for SMS rates to fall sharply. Voice calls are already being offered at 1 paisa per second. As new entrants flood into the market, SMS tariffs could become the next major frontier of the pricing war now raging in the Indian mobile services industry. SMS and other value-added services form 10% of the Indian telecom industry's annual Rs 1 lakh crore-plus revenues. The current regime followed by telecom operators is `bill and keep'. This means your operator keeps the entire amount that he bills you for the SMS and pays nothing to the network on which the SMS is sent. This is for two reasons. First, the proportion of traffic across networks is roughly equal, and second, the cost of termination is negligible. Trai has so far refused to regulate SMS tariffs along with some other tariffs under what is known as forbearance. Forbearance is usually adopted by regulators when they believe that competitive markets are working and tariffs reflect true costs. As it turns out, the true cost of sending an SMS would never have come to light if new entrants had not been forced to sign interconnection agreements with existing operators at a price that is far higher than the actual cost. Several potential new entrants told TOI this points to a clear need for immediate regulatory intervention. If the price of sending an SMS reflects true costs, it should fall to no more than a few paise, they point out. While telecom minister A Raja has been talking about reducing telecom tariffs by bringing in new competition, it is ironic that factors driving telecom tariffs are coming to light due to infighting between existing operators and due to lack of pro-active regulation. Bejon Misra, chairman, CCEA or Cell for Consumer Education & Advocacy told TOI, "Recent developments have shown that India's claim of having the world's lowest tariffs is not true. Trai must promptly intervene to prevent cartelisation by incumbents aimed at defeating the interests of consumers by preventing cost-based tariffs." Predictably, the Cellular Operators Association of India (COAI) has a different view. Speaking to TOI, its acting director general T R Dua said, "Trai has followed forbearance and that should remain its policy." Several incumbents refused to comment on the true costs of terminating an SMS but admitted to the existence of a big margin. Stein-Erik Vellan, MD of Unitech Wireless, told ToI, "The lack of cost-based Interconnection Usage Charge (IUC) is perhaps the most significant anti-competitive practice that is hindering free and fair competition. It needs to be overhauled. The regulator made an exception to its policy of forbearance in the spirit of fair play when it intervened earlier to reduce IUC charges for voice calls from 30 paise to 20 paise. Trai must undertake a similar regulatory intervention to create a level playing field in the industry". Unitech Wireless may be among the first new entrants to launch service in December. As more new entrants prepare for launch, Trai may have no choice left but to intervene. A senior Trai official admitted to TOI that the last review in March had not included a new tariff policy for SMS. "However, new operators have to survive and flourish so we will need to intervene if they complain to ensure a level playing field," he said. Experts and consumer activists, however, argue that given Trai's own cost data from its IUC regulation of August 2006 vintage, it need not wait for complaints but should act decisively and immediately.