Reliance Life buys UK company
Reliance will buy 9.63 crore shares which will account for about 74% of GeneMedix, reports Suprotip Ghosh.india Updated: Dec 21, 2006 20:37 IST
Mukesh Ambani-controlled Reliance Life Sciences is in for its first big ticket acquisition abroad. The Rs 1200 crore life sciences arm of the Rs 1 lakh crore Reliance Group would be paying up to £32.1 million (Rs 281 crore) to acquire a controlling stake in GeneMedix and its future ventures including the setting up of new companies.
GeneMedix, the UK-based biotechnology company passed a resolution to this effect at a meeting of its shareholders. This was notified by a release on Thursday.
GeneMedix is a biotechnology company focussing on core expertise of protein development scale-up and manufacture. It currently has a manufacturing unit in Ireland. However, when contacted Reliance official declined to comment.
The acquisition could mean that Reliance is planning to expand its foothold in the UK and EU markets, said a source on condition of anonymity citing policy reasons.
Reliance will buy 1.168 million (9.63 crore) shares with a value of about £14.6 million (Rs 127.9 crore), which will account for about 74 per cent of GeneMedix enlarged share base.
England-based GeneMedix told the London Stock Exchange. Reliance may invest another £17.5 million (Rs 153.32 crore) as part of a 5-year warrant. The UK company is expanding its share base to facilitate the acquisition.
GeneMedix, which will remain a publicly traded company, will use the funds for current research and to buy additional experimental products, according to a company release.
GeneMedix will patent new inventions that may lead to a range of opportunities, including out-licensing and the founding of new companies.
Reliance Life Sciences is into cell-based therapy and providing of diagnostic services for symptoms including breast cancer. The company is also working on cell-based therapies for patients suffering from burns. The total market for cell-based therapies in the world is estimated to be over $ 25 billion (Rs 1, 11,000 crore) in 2005, according to industry sources.
GeneMedix also participates in diversified medical activities including plant and industrial biotechnology opportunities. Specifically, these relate to biopharmaceuticals, molecular diagnostics and genetics, plant tissue culture, plant metabolic engineering, biofuels, biopolymers, biochemical's, clinical research services and contract manufacturing.
Phase I of GeneMedix's development focuses on four cell lines in-licensed from Shanghai Institute of Biochemistry and Cell Biology (IBCB). The company is currently engaged in developing manufacturing processes, which is then transferred to sites for commercial production.
Phase II involves in-licensing of additional cell lines to complete the product portfolio and initiating the development of new formulations. These new formulations will focus on new delivery systems for the cell-based therapies including delivery through the lungs.
Phase III will consolidate and build on in-house expertise, offering services to other companies developing protein products. This will involve a mixture of process development, formulation work and contract manufacture.