In another David and Goliath replay, Zenotech Laboratories has called upon the directors of Daiichi Sankyo to honour the commitment made by its management team and revise its open to the originally stated Rs160 per share.

Daiichi board had made the offer of Rs160 in July 2008. With the stock markets haveing fallen subsequently, Zenotech shares have been hovering around 115 per share.

Dr Jayaram Chigurupati, managing director of Zenotech has alledged that the agreement was ratified twice and was infact in place till the eve of 15 January 2008.

Today, Daiichi had offered to purchase upto 68,85,000 fully paid-up equity shares of the Zenotech, representing 20 per cent of the current paid up equity share capital at a price of Rs113.62.

At the beginning of the year, Daiichi Sankyo Company Limited announced that it plans to record a valuation loss and one-time write-down of goodwill on its investment in group subsidiary Ranbaxy Laboratories Limited for the fiscal third-quarter ended 31 December 2008.

Daiichi Sankyo had acquired a controlling stake in Ranbaxy, and the deal also enable it to acquire a majority stake through an open offer for Zenotech, in which Ranbaxy held 45 per cent. In April 2007, Ranbaxy Laboratories had raised its stake in Hyderabad-based Zenotech Laboratories to 45-per cent from the previously held 7 per cent, for Rs214 crore.

Though Ranbaxy owned majority control in Zenotech, the company is not its subsidiary.

Daiichi will also get the around 14.9-per cent equity each in Jupiter Bioscience, Kribs Biochemical and Orchid Pharma, that Ranbaxy holds in each of these companies.

Ranbaxy had initially bought a 22-per cent stake from the existing promoter and MD of Zenotech, Dr. Jayaram Chigurupati, and the remaining 16 per cent via preferential allotment of shares, both valued at Rs160 each share, which cost Ranbaxy Rs214 crore.

The buyout offered Ranbaxy direct access to biosimilar and oncology sectors, which are the two key drugs sections where the Indian pharma major did not have a presence. The worldwide market size for biosimilar is about $65 billion whereas the oncology market is valued about $35 billion.

Zenotech is a specialty generic injectables company with strong expertise in the area of biotechnology. The company's predominantly high-value injectables product portfolios serve niche therapy areas like oncology, anesthesiology, gynecology, and neurology. The company has research and development facilities in India and in the US. Its oncology and biologics manufacturing facilities are located near Hyderabad.

Zenotech has sought the intervention of market regulator SEBI and the Foreign Investments Promotion Board.