Navana Pharmaceuticals plans to invest Tk 145.27 crore to construct a five-storey production unit for generic drugs.

The drug company will provide Tk 132 crore from its own funds and external sources and the remaining will be availed from proceeds of an initial public offering (IPO).

The factory, to have an area of approximately 20,000 square feet, will comply with World Health Organization's good manufacturing practices (GMP).

The GMP ensures that medicinal products are produced in a consistently controlled environment adhering to quality standards appropriate for the use intended.

The new production unit will enhance the company's existing annual production capacity by around 100 crore units, the company said in a price sensitive disclosure on the Dhaka Stock Exchange website.

Meanwhile, the board of directors of Navana Pharmaceuticals has brought changes to plans on the use of the IPO proceeds.

The company earlier planned on using Tk 13.18 crore for the modernisation and expansion of a facility generating a small volume of parenteral and ophthalmic products.

Parenteral refers to that inside the body but outside the intestine while ophthalmic means relating to the eye and its diseases.

Now, the board has decided to use the fund in the construction of the new generic drug production unit.

A generic drug is a medication created to be the same as an already marketed brand-name drug in dosage form, safety, strength, route of administration, quality, performance characteristics, and intended use.

The company needs to take approval from general shareholders to utilise the IPO proceeds for a different purpose and so will hold an extraordinary general meeting on May 2 to get the approval.

In 2022, the company raised Tk 75 crore under the book building method to build a general manufacturing building, utility facilities, engineering buildings, renovate a unit for cephalosporin, which is a type of antibiotic, and partially repay loans.

The company said it had already spent 71.31 percent of the IPO proceeds.

Shares of Navana Pharmaceuticals dropped around 3 percent to Tk 90 on Thursday.

In the July-December period of 2023, its sales rose 20 percent year-on-year to Tk 328 crore.

In the same period, the company's profits rose 57 percent year-on-year to Tk 22 crore.