INDIA BUSINESS WORLD OCTOBER (1st - 20th) 2007
The Month that was ...
RANBAXY UPS ZENOTECH STAKE TO 45%
Ranbaxy Laboratories has taken control of Hyderabad-based biotech company Zenotech by increasing its stake in the latter to 45% from 7%, for Rs 214 crore. The buyout is valued at Rs 160 per share.
Ranbaxy will buy 22% stake from Zenotech MD Jayaram Chigurupati and another 16% through preferential allotment of shares. Additionally, Ranbaxy will make an open offer to buy up to 20% stake at Rs 160 per share or as determined by Securities and Exchange Board of India (Sebi).
Ranbaxy would fund the buyout through internal accruals and debt. Rabo Bank and Yes Bank were the advisors to Ranbaxy and Zenotech, respectively.
The takeover will provide Ranbaxy immediate access to biosimilar and oncology segments - two key drugs segments where the Indian major did not have a presence. The global market size for biosimilar is around $65 billion while the oncology market is valued around $35 billion.
"The strategic partnership will help Ranbaxy to significantly enhance its product portfolio in niche segments which has high growth opportunities. The increasing importance of biologics in the global pharmaceutical industry and the opening up of the generic biologics in the regulated market makes it opportune for Ranbaxy to enhance its presence in this area," Ranbaxy CEO Malvinder Singh said.
With Zenotech, Ranbaxy plans to start launching a range of products in the niche oncology and biosimilar markets shortly. Ranbaxy plans to launch 6-7 special injectable oncology drugs in 2008-09 in the US. The company also plans to launch biosimilar drugs in EU markets by 2010-2011.
"Zenotech has one of the best biosimilar pipelines globally which is worth $23 billion. We will start launching biosimilars in emerging and developing markets and later to the regulated markets in the EU and US, "Mr. Singh added.
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