Delhi-based Morepen Laboratories plans to strengthen its presence in the US over-the-counter (OTC) market with the launch of range of 35 new products in six months. The company is also looking for a partner for a marketing alliance in the US, since, given the highly competitive nature of the US market, it is wary of setting up front end operations there.

The new OTC products in the US will be sold under the Dr. Morepen brand. Dr. Morepen, which has hived off as an independent company some time ago, has recently become a subsidiary of Morepen Lab through a conversion of preference capital into equity.

The hiving off of Dr Morepen was meant to boost volumes in the fast moving consumer goods segment. Industry experts allege that the experiment did not quite go the way Morepen had hoped it would.

Pegging the immediate investment at Rs.40 crore, Morepen Lab's Chairman and Managing Director, Sushil Suri, said it would be financed through internal accrual. In the 18 months to March 31 this year, the company reported a loss of Rs.47 crore on an income from operations Rs.123.28 crore. It also owes nearly Rs.150 crore to fixed depositors. A company executive admitted that it was finding it difficult to borrow from banks.

The company had raised Rs.72.5 crore through a GDR issue two years ago on the Luxembourg Stock Exchange, which has got entangled in a case with the Debt Appelate Tribunal. A couple of months ago, the government had appointed two directors on the company's board.

Suri said he was hope the tide would turn. "Generics are sold on the price positioning and popularity of the salt concerned whereas OTC are pushed through good distribution channels. OTC is our strength and we would prefer marketing alliances in US as the risks and rewards get shared.

"The company has still to recover from the setback it received as Loratadine was shifted to the OTC segment by patent holding Schering Plough after Morepen had won a Para IV challenge, which would have given it a 180-day exclusivity period.