Intellectual Thoughts by Sanjay Panda


Mylan to buy Merck Generics Unit

Mylan Laboratories Inc. agreed to buy Merck KGaA's generic-drug unit for 4.9 billion euros ($6.7 billion) in cash to become the world's third-largest maker of generics.The acquisition will create a company with 2006 sales of about $4.2 billion. Mylan has arranged debt financing from Merrill Lynch & Co., Citigroup Inc. and Goldman Sachs Group, Inc. Mylan beat a rival bid by Teva, according to several people familiar with the transaction. Darmstadt, Germany-based Merck is selling the unit to pay down debt for its $13.7 billion acquisition of Serono SA.

The purchase, the biggest in generics since Teva Pharmaceutical Industries Ltd.'s $7.6 billion takeover of U.S.- based Ivax Corp. in January 2006, brings to an end a four-month battle for the world's fourth-largest maker of generics. The price Mylan is paying is more than five times its own sales in the year ended March 2007 of $1.26 billion and more than its own market capitalization of $5.39 billion. The acquisition comes almost two years after Mylan's failed $4 billion bid to buy King Pharmaceuticals Inc., the Bristol, Tennessee-based maker of the heart pill Altace. Mylan in January completed the $560 million purchase of a controlling stake in Secunderabad, India-based drugmaker Matrix Laboratories Ltd., giving the U.S. company access to lower-cost labor and materials. Mylan was the third-largest seller of generic drugs following Teva and Sandoz respectively. Actavis, Stada Arzneimittel AG, Ranbaxy and private equity bidders including Apax Partners Worldwide LLP and Bain Capital LLC also vied for the Merck unit, according to people with direct knowledge of the process.

Global warming- Climate change

With climate change experts huddled in Bangkok over global warming, India is finally forming an experts committee that will look into this issue. The need for country-specific reports on this subject has increased after the United Nations Intergovernmental Panel on Climate Change (IPCC) confirmed earlier this year that the consequences of climate change have begun to show. The developed countries have stepped up their campaign for forcing the developing countries, such as India and China, to shoulder greater responsibility for reversing environment damage. This is sure to become a major issue when the emission reduction targets are re-negotiated for the new protocol on climate change that will succeed the present Kyoto accord once it expires in 2012.

Unless India is well-prepared with documentary evidence to present its case for continuation of emission reduction holiday, it will be caught on the wrong foot, as happened in the case of tariff reductions under the new global trade agreement, patenting norms under the trade-related intellectual property rights (TRIPs) for industrial products, and protection of plant genetic resources under geographical indications and other protocols.

Each time, our country & the thinktank had to take post-accord protective action after the global norms had already been laid down. What needs to be realised is that India is neither a major environment polluter (its contribution to greenhouse gases is merely 6 per cent) nor is it unmindful of its responsibilities. What is perhaps not duly appreciated is that India began promoting renewable energy sources by setting up an exclusive ministry of non-conventional sources of energy much before other countries thought of doing so. It is hardly surprising, therefore, that India has emerged as a leading player in the global carbon credit trading market.

Of the total 633 projects registered with the CDM Executive Board of the UN Framework Convention on Climate Change (UNFCCC), as many as 220—34.75 per cent—are from India. Notably, the bulk of these projects belong to the categories of energy efficiency and renewable energy, reflecting emphasis on the clean development mechanism (CDM). India, in its self-interest, must promote the CDM at a greater pace. But, unlike the developed countries, it has begun to industrialise in real terms only now and can ill-afford any obligation that will hurt this process at this juncture. It has, therefore, to tread with extreme caution when it comes to taking on the targeted emission reductions. What is important for India is to balance the need for development with that for containing the damage caused by climate change.

India's space mission

The flawless 11th flight of the Polar Satellite Launch Vehicle (PSLV-C8) of the Indian Space Research Organisation (Isro) is more significant than all its previous missions, though each one so far has marked a step forward in the country’s space capability. For one, the PSLV-C8 is the first purely commercial flight that has successfully put an Italian 352-kg astronomical satellite, called AGILE, into space orbit on a contract won against stiff global competition. In fact, Isro had to modify the standard configuration of the PSLV to meet the requirements of the low-weight AGILE, which, additionally, had to be placed in a low inclination orbit. For this, Isro had for the first time to do without the six solid propellant strap-on motors of the first stage and reduce the propellant in the fourth stage by 400 kg, compared to the previous PSLV flight.

Despite these design modifications, Isro has managed to recover the bulk of the PSLV cost, reckoned at around Rs 65 crore, by charging the Italian space agency a competitive price of $ 29,000 per kg. Indeed, the AGILE, too, is unique in certain respects. It is said to be the only European mission entirely devoted to high-energy astrophysics studies. Besides, it is the first satellite powered by commercially available, space-qualified rechargeable lithium-ion batteries.

As such, the country will now be viewed as a price-competitive contestant in the global satellite launch market, estimated at between $1.5 billion and $2 billion. Even if India manages to corner just 2 per cent of this market, as Isro hopes to do, it will mean substantial business in a wholly new sphere, and make Sriharikota the country’s first commercial spaceport. Considering the impeccable record of the PSLV—all its operational flights so far have been successful—and the deft design modifications to suit the customer’s needs, more orders are bound to be on their way for commercial space launches. In fact, since its first flight in 1994, the PSLV has accomplished several feats. These include launching eight Indian remote sensing satellites, an amateur radio satellite HAMSAT, a recoverable space capsule SRE-1, and six small satellites for foreign customers.
Amongst its most notable achievements is the launch of India’s exclusive meteorological satellite Kalpana-1 into geosynchronous transfer orbit. While undertaking a wholly commercial mission this time, Isro has also managed to use the spare capacity of the PSLV-C8 (which can carry a 1-tonne payload) for catapulting into space an advanced avionics module (AAM), weighing 185 kg, to test advanced launch vehicle avionics systems like mission computers, navigation and telemetry systems. Isro has so far been using mission computers developed in the 1990s. However, state-of-the-art navigational systems and computer aids have now become vital since it is the PSLV which is proposed to be used to launch India’s first spacecraft mission to the moon (Chandrayaan-1).

So great achievement & congrats to all the concerned personnel in ISRO
BS