Sun Pharma also expects the Detroit-based Caraco Pharmaceutical Laboratories to receive approvals for at least three abbreviated new drug applications (ANDAs). Sun Pharma holds a 48.54 per cent stake in Caraco and expects the US firm to break-even in 2002.

Sun Pharma managing director, Dilip Shanghvi told The Financial Express that the company will shortly finalise the members on the proposed scientific advisory board. "We have already started the first phase of recruitment in Chennai and this will help us look at new emerging options in technology and also the quality of work we are doing," he said.

Sun Pharma plans to spend approximately 4.5 per cent of its turnover on research and development this year and is also talking to several government-run laboratories for linkages.

Meanwhile, Caraco has submitted five ANDAs to the US Food and Drug Administration (FDA), and three more products await expiration of new chemical entity (NCE) exclusivity, after which submissions can be made. Sun Pharma also said that four more products at Caraco are in an advanced stage of development, though the details on this front could not be got.

The postponement in the targeted break-even date is essentially due to a delay in receiving ANDA approvals. The FDA has, in its pre-inspection approval, raised some manufacturing related queries. The company has already initiated corrective measures and the approvals will come once the Caraco unit is re-inspected by the FDA. Caraco which is expected to break-even in 2002, with a projected turnover of roughly $ 17 million, is also likely to raise $5-10 million debt with banks and financial institutions in the US. Since 1996, Sun Pharma has invested $7.5 million towards equity in Caraco, while an additional $5.3 million was invested as debt.

For the year ended December 1999, Caraco registered a loss of $9.73 million on sales of $2.89 million. Industry experts, however, say that the timing of ANDA approvals are eclipsed on account of the granting of patent extensions and the competitive conditions that may prevail during that time.