Ranbaxy to up Zenotech Lab stake to 45 per cent for Rs214 crore

Mumbai: Drug major Ranbaxy Laboratories Limited (Ranbaxy) will pay Rs214 crore to raise its stake in Hyderabad-based pharma company Zenotech Laboratories Limited (Zenotech) from the current 7 per cent to 45 per cent.

Ranbaxy will also make an open offer as per SEBI`s takeover norms to buy up to 20 per cent additional stake from public shareholders. The open offer will be at Rs160 per share.

After the open offer, the existing promoters will hold 25 per cent stake in the expanded equity capital of Zenotech. Jayaram Chigurupati will continue as managing director of the company, Ranbaxy said in a statement.

"The increasing importance of biologics in global pharmaceutical industry and opening of generic biologics in the regulated market makes it opportune for Ranbaxy to enhance its presence in this area. Speciality injectables that include oncology products constitute an attractive segment that underpin our strategic intent," Ranbaxy CEO and managing director Malvinder Mohan Singh said.

"Ranbaxy''s increase in stake will enable Zenotech to concentrate on its core competencies of cutting-edge drug development and specialised manufacturing. Access to Ranbaxy''s unmatched global market reach, quality compliance and regulatory and IP expertise will enable us to take the business into its next phase of growth," said Chigurupati.

Zenotech has received regulatory approvals for three oncology biopharmaceuticals - GCSF (granulocyte colony stimulating factor), GM-CSF (granulocyte macrophage colony stimulating factor) and IL-2 (Interleukin-2). For the latter two, Zenotech is the first to receive approvals in India, and has a pipeline of seven biopharmaceutical products in different stages, all developed in-house. It has state-of-the-art manufacturing facilities in Hyderabad, with R&D facilities in Hyderabad and New Jersey, US.

The global biopharmaceuticals market is valued at around $65 billion at innovator prices and Zenotech''s pipeline addresses a third of this market. The oncology market is worth over $35 billion and is considered among the fastest growing therapeutic segments globally.