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Sunday, August 23, 2009

Inflation in red for 10th straight week; food prices firm

The annual rate of inflation stood at -1.53% for the week ended August 8, 2009 as compared to -1.74% for the previous week ended August 1, 2009, the Commerce & Industry Ministry said. Inflation was at 12.82% during the corresponding period of the last year (week ended Aug. 9, 2009). The Wholesale Price Index for 'All Commodities' for the week ended August 8, 2009 rose by 0.1% to 237.4 from 237.2 for the previous week. The Government announced that it had kept the inflation rate unchanged for the week ended June 13 at -1.14%.

The index for 'Primary Articles' rose by 0.2% to 262.9 while the inflation for this group stood at 5.79% versus 5.17% in the preceding week. The index for 'Food Articles' group rose by 0.2% to 262 from and the corresponding inflation increased to 10.55% from 10.16% in the week ended August 1. The index for 'Non-Food Articles' declined by 0.1% to 241.4 while its inflation rate stood at -1.55% as against -2.74% in the previous week.

The index for 'Fuel, Power & Light' declined marginally to 338.2 from 338.3 in the previous week while the corresponding inflation rate for this group too remained nearly unchanged at -11.09% versus -11.07% in the preceding week.

The index for 'Manufactured Products' group rose by 0.1% to 206.1 and its inflation was at -0.63% compared to -0.77% in the previous week. The index for 'Food Products' group rose by 0.4% to 232.5 while its corresponding inflation stood at 9.62% as against 8.68% in the previous week.

Though inflation, based on the WPI, shrank for the tenth week in a row, the prevailing drought-like conditions continued to push up food prices and could spike further once the high base effect of last year tapers off in the coming months.

The Government will have to pre-empt the impending spike in food prices by clamping down on speculative hoarding by traders and by bolstering local supplies of essential food products. The Centre will have to reply on think out of the box as monetary policy alone cannot tackle supply-side bottlenecks.

At its first quarter policy review last month, the Reserve Bank of India (RBI) revised up its inflation outlook for the fiscal year 2009-10 to 5% from 4%. It left the key policy rate unchanged after having slashed the rate by 425 basis points between October and April.

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Aurobindo Pharma to acquire Trident Life Sciences

Aurobindo Pharma Ltd. announced that its Board of Directors has approved the proposal to acquire 100% stake of Trident Life Sciences Ltd., subject to suitable agreements being executed between the parties for the same and conditions customary to dosing of the transaction. TLSL was incorporated in 2004 and has well established Clinical Research Organizations (CRO). It is in the process of implementing a liquid injectables facility in the Medak district near Hyderabad. The management of TLSL with an intention to focus on its core business of CRO has demerged the CRO business into a separate company. Post demerger, TLSL is left with the Injectables business. The facility specializes in manufacture of general injectable range of formulation products, including glass vials for lyophilized sterile powder and liquids, ampoules, pre filled syringes and blow filled seals. The facility shall be acquired at its book value as on June 30, which is being the least of the valuation arrived by the financial advisors.

Oglemilast study disappointing: Glenmark

Forest Laboratories Inc. and Glenmark Pharmaceuticals SA Switzerland, a wholly owned subsidiary of Glenmark Pharmaceuticals Ltd., announced top-line results from a Phase IIb dose range-finding study of Oglemilast in patients with Chronic Obstructive Pulmonary Disease (COPD). Once-daily treatment with Oglemilast did not show a statistically meaningful increase from baseline compared to placebo in the primary endpoint trough FEV1, a measure of pulmonary function that is decreased in patients with COPD. Oglemilast was well tolerated at all doses studied. "Oglemilast is an orally administered PDE 4 inhibitor, which we believe to be an important and novel therapeutic target for COPD. We are, of course, disappointed that Oglemilast has not been successful in this study," said Howard Solomon, Chairman and CEO of Forest Laboratories. "Oglemilast is still being studied for the treatment of asthma, with results expected during the first calendar quarter of 2010. We are considering together with Glenmark what further action would be useful or appropriate." Oglemilast is a potent and selective inhibitor of phosphodiesterase 4 (PDE4). Oglemilast is currently in development for the treatment of COPD and asthma. Forest Labs licensed US rights for Oglemilast from Glenmark Pharma.

Eli Lilly patent for Gemzar...US court rules in favour of Sun Pharma

Eli Lilly & Co.’s method of using patent for its cancer drug Gemzar was invalidated by a federal court in Michigan. The court ruled in a lawsuit filed by India's Sun Pharmaceuticals. The disputed patent deals with methods of use for Gemzar, which was set to expire in 2013. The decision has no bearing on Eli Lilly’s compound patent for Gemzar, a medicine for lung, breast, pancreatic and ovarian cancer with 2008 worldwide sales of US$1.7bn. The court decision does not allow for the immediate entry of generic gemcitabine in the US market, Robert Armitage, general counsel at Eli Lilly was quoted as saying. Gemzar’s compound patent remains in force through 2010. Eli Lilly plans to appeal the ruling. Sun Pharma sued Eli Lilly in 2007 claiming its method of use patent for Gemzar is invalid. It is seeking to market a generic version of the drug before Eli Lilly’s patent expires. Eli Lilly claimed Sun Pharma's generics infringe on its Gemzar patents.

Govt raises MSP for Rice, other crops to counter drought

To ease the financial pressure on farmers reeling under the drought like situation, the Government on Aug. 20 announced that it was raising the floor prices for Paddy (Rice), Tur, Moong and Sesamum. The Minimum Support Price (MSP) for the common grade of Rice has been raised to Rs950 per 100 kilograms, while the price for Grade A variety of Rice has been increased to Rs980 per quintal. This implies an increase of Rs100 in absolute terms for both the grades of Rice. In percentage terms, the increase in MSP is 11.76% for the common grade and 11.36% for Grade A. An additional incentive bonus of Rs50 per quintal over the MSP was also approved for the Grade A variety of Rice.

This was announced by the Union Home Minister P. Chidambaram after a meeting of the Union Cabinet Committee on Economic Affairs (CCEA). "India has ample stocks of Wheat and Rice and will take every step to mitigate drought," he told reporters. Meanwhile, the MSP for Tur was increased by Rs300 (15%) to Rs2300 per quintal while for Moong it was hiked by Rs240 (9.5%) to Rs2760 per quintal. The MSP for Sesamum was raised by Rs100 (3.64%) to Rs2850 per quintal.