The company made this announcement after market hours on Wednesday, 29 August 2012.

Meanwhile, the BSE Sensex was down 92.32 points or 0.53% to 17,398.49.

On BSE, 5.41 lakh shares were traded in the counter as against average daily volume of 4.47 lakh shares in the past one quarter.

The stock hit a high of Rs 117.80 and a low of Rs 110.40 so far during the day. The stock had hit a 52-week low of Rs 100.55 on 16 August 2012. The stock had hit a 52-week high of Rs 210.45 on 7 September 2011.

The stock underperformed the market over the past one month till 29 August 2012, rising 3.81% compared with the Sensex's 3.87% rise. The scrip had also underperformed the market in past one quarter, declining 8.48% as against Sensex's 6.4% rise.

The pharmaceutical company has equity capital of Rs 70.45 crore. Face value per share is Rs 10.

Orchid Chemicals & Pharmaceuticals (Orchid) said it had entered into a business transfer agreement (BTA) with Hospira for the sale and transfer of Orchid's Penicillin and Penem active pharmaceutical ingredient (API) business and the API facility at Aurangabad in Maharashtra together with an associated Process R&D infrastructure in Chennai for a total cash consideration of approximately $200 million. Approximately 830 employees would be transferred to Hospira, as part of this business transfer, Orchid said.

As some of Orchid's API requirements for the non-penicillin, non-penem, non-cephalosporin (NPNC) business were supplied by the Aurangabad facility, Hospira will supply such NPNC API to Orchid through a long-term agreement that both companies have entered into, Orchid said. This agreement builds on the existing product development and commercialization relationship between Hospira and Orchid, the company said in a statement.

Orchid will continue to supply its Cephalosporin APIs to Hospira in accordance with the long-term supply contract.

This business transfer agreement also demonstrates Orchid's ability to build value in its chosen product domains and successfully monetize them to create value for the stakeholders, the company said in a statement. The proceeds from this business transfer will be utilized for de-leveraging Orchid's debt position and also pave the entry for the company's foray into newer product verticals, Orchid said in a statement.

Commenting on the development, Mr. K Raghavendra Rao, Chairman & Managing Director, Orchid Chemicals & Pharmaceuticals said, "Orchid's business model has crossed many milestones over the years. With investments across the pharma value chain ranging from research to API & FDF manufacturing, we have harnessed key product opportunities and built a strong revenue base. Moving on, we would like to replicate this success by creating more niche product and therapeutic verticals which will continue to power our growth. This business transfer agreement with Hospira will help us fast-track our future growth while maintaining a healthy debt profile in our balance sheet. Given the current scenario, it is a prudent decision for Orchid to monetize these verticals and bring in cash to de-leverage its debt position and fund newer growth horizons".

The transaction has been unanimously approved by Hospira's and Orchid's boards of directors. It is subject to Orchid's shareholders, regulatory and legal approvals, as well as customary closing conditions, Orchid said. Assuming all necessary approvals are secured, the transaction is expected to be completed in Q3 December 2012, Orchid said in a statement.

Orchid Chemicals & Pharmaceuticals reported consolidated net loss of Rs 54.02 crore in Q1 June 2012, compared with net profit of Rs 16.92 crore in Q1 June 2011. Net sales declined 11.7% to Rs 364.63 crore in Q1 June 2012 over Q1 June 2011.

Orchid Chemicals & Pharmaceuticals is involved in the development, manufacture and marketing of diverse bulk activities, formulations and nutraceuticals.