Kala Pharmaceutical Industries, India’s largest private pharmaceuticals company, announced that it is filing for Chapter 11 bankruptcy protection and will close its operations by the end of March.
The company filed the filing on Wednesday and will be filing its final notice of reorganization on March 27.
Kala is one of India’s biggest private companies with a market capitalization of over Rs 2,000 crore ($35 billion) and a market share of over 30%.
The company has been in business since 1991 and its flagship product, Vioxx, was the first generic version of the blockbuster painkiller oxycodone to be sold in India.
Kalyani Pharmaceuticals, India ‘s largest private pharma company, said in a statement that it would close the company’s operations by March 27 and would be filing for bankruptcy protection by the second quarter of 2018.
“This is a tough time for the company.
Kalyani has taken a long and difficult road with a poor performance, especially in the second half of the fiscal.
We are now going through this challenging period in our operations and we cannot keep our doors open for long,” said Kalyini CEO Praveen Kalyan.
Kalyini said the company has invested Rs 5,000 million in the current fiscal.
“The company has a lot of work to do.
It will be challenging to survive in this difficult situation.
We will close the business and close the doors of the company to the public,” he added.KALA PETROLEUM AND COFFIN IN THE MONEY In a statement, Kalyin said the loss in the last quarter was due to adverse changes in the share price.
“Our operating results and earnings, adjusted for currency fluctuations, declined significantly in the quarter, resulting in a net loss of Rs 534.71 crore,” the company said.
“We have also taken a strong stance in this quarter against any future acquisitions and are continuing to seek suitable alternatives.”
KALAS COFFINE, BACTERIA AND DRUG COSTS Kala Pharmaceutical, India is one among a group of drug companies which have been targeted by the government of India for increasing the prices of their drugs, leading to a drastic drop in the cost of medicines.
In November last year, the Centre of Excellence in Drugs and Therapeutics (CoEAD) in the Indian government issued a directive for increasing generic drug prices from the current Rs 100 to Rs 600 per dosage.
The price increase was made by the Centre for the purpose of reducing the price of generic drugs by at least 50% compared to the cost at the end, according to a joint statement by the CoEAD and the Indian Institute of Pharmaceutical Sciences.
Kalinys price of its drugs has been pegged at Rs 50,000 per dosage and the government is expected to increase the price to Rs 50 lakh per dosage by the third quarter of 2019.
The government has been targeting the pharmaceutical industry to raise drug prices by 50-60% by 2019 and has been imposing excise duty on pharmaceuticals companies which are making cheap generic drugs.