The proposed arrangement with Nicholas Piramal will essentially cover antibiotics and anti-diabetes drugs though finer details could not be ascertained. Hoechst's antibiotic and anti-diabetic range includes newer brands like Targocid (teicoplanin), Cefrom (cephirome) and Cetapin (metformin).

Such co-marketing deals, as in the case of Allegra (fexofinadine hydrochloride), are usually aimed at making use of a larger marketing capacity or enhancing the noise level in the market. Ranbaxy's fexofinadine drug has been branded, All Day, and the Indian firm, analysts say, is sourcing the basic ingredient from the German multinational.

Earlier,Hoechst Marion Roussel chairman Vijay Mallya told shareholders at the annual general meeting on Tuesday that the planned merger of the German multinational with Rhone Poulenc "would help both companies become more competitive and reach common goals quicker -- to discover and develop innovative products that meet unmet medical needs and to improve profitability."

The Hoechst-Rhone Poulenc combine (christened Aventis) would have a strong technological platform with a network of key alliances and is expected that 30 new products would be launched by 2002. Hoechst has already launched six new drugs in the current year in India and is expected to bring in Amaryl (for diabetes) and Arava (for rheumatoid arthritis) in due course. Such new products enjoy a price control holiday for the first five years, Mallya added.

On shareholders' queries on higher inventory levels, he said that this was essentially to cater to restructuring of manufacturing operations and is a `one-time aberration' in inventory control. Thecompany had recently set up a new facility at Verna in Goa. Hoechst Marion Roussel has also not incurred any further expenditure on research and development since October 1, 1998, following the sale of the company's basic research facility at Mulund in Mumbai to Nicholas Piramal.

Mallya also said that the board of directors had decided to change the financial year from April-March to the calendar year in order to fall in line with international standards. The current financial year will, therefore, be for a nine-month period from April to December, 1998.Meanwhile, shareholders cleared all resolutions including the appointment of Roussel India managing director N Aleco, as wholetime director on the Hoechst board for a three-year period with effect from November 3, 1998.

Decline in exports plays the spoilsport

Hoechst Marion Roussel has registered a 53 per cent drop in profit before extraordinary items to Rs 14.1 crore for the six-month period ended September 30, 1998, as compared with Rs 30 crorein the corresponding period of the previous year. Sales for the period were lower at Rs 2.84 billion.

Hoechst Marion Roussel chairman Vijay Mallya attributed the lacklustre performance to a 25 per cent decline in exports, largely to Russia.

"The company relied, to some extent, on exports to Russia and the turmoil there resulted in lost opportunity," he said. But, with the Russian government's move to increase the allocation of reserves for medicines, the company was set to capitalise on the opportunity, provided payment was ensured, he added.