Ranbaxy to consolidate stake in Zenotech Labs
Ranbaxy says it would increase its stake in Hyderabad-based drug firm Zenotech Labs to 45 per cent, involving a payout of Rs 214 crore, reports Gaurav Choudhury.business Updated: Oct 03, 2007 21:43 IST
Pharma major Ranbaxy on Wednesday said that it would increase its stake in Hyderabad-based drug firm Zenotech Labs to 45 per cent, involving a payout of Rs 214 crore, and make an open offer to buy additional shares.
Ranbaxy CEO and Managing Director Malvinder Mohan Singh said that the two companies have signed definitive agreements for an increase of Ranbaxy's equity from its current 7 per cent to 45 per cent for Rs 160 per share. This exercise involves the purchase of shares from the existing promoters and a preferential offer to Ranbaxy by Zenotech.
The transaction triggers a mandatory open offer by Ranbaxy to other shareholders of Zenotech, at a price of Rs 160 per share or as determined by market regulator Securities Exchange Board of India (SEBI). After the offer, the existing promoters of Zenotech will have a 25 per cent stake in its expanded equity capital and Dr Jayaram Chigurupati would continue as the company's managing director.
The global bio-pharmaceuticals market is currently valued at $65 billion approximately, while the global oncology market is worth over $ 35 billion and is considered among the fastest growing therapeutic segments.
Speciality injectables are a high-value addition segment, compared with orals and Ranbaxy plans to file seven US abbreviated new drug applications (ANDAs) from Zenotech facilities in the coming few months.
Zenotech is a specialty generic injectables company with expertise in the area of bio-technology. It has research and development facilities in India and in the US. Its oncology and biologics manufacturing facilities are located near Hyderabad.
"The increasing importance of biologics in the global pharmaceutical industry and the opening up of the generic biologics in the regulated markets makes it opportune for Ranbaxy to enhance its presence in this area," Singh said.