Business Daily from THE HINDU group of publications
Thursday, Oct 04, 2007
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Business Daily from THE HINDU group of publications Thursday, Oct 04, 2007 ePaper |
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BL Research Bureau Ranbaxy Labs’ move to pick up an additional 38 per cent stake in Zenotech Laboratories (ZLL), will allow it to acquire a presence in the biopharmaceuticals segment, which is expected to drive the next phase of global growth in healthcare. Biopharmaceuticals involves using biotechnology to produce drugs like human insulin, as a lower cost alternative to traditional chemically synthesised drugs. Currently the global biopharmaceutical market is valued at over $60 billion at innovator prices and Zenotech’s pipeline addresses a third of this market, according to Ranbaxy Labs. Buying into Zenotech, which focuses on speciality generic injectibles and biopharmaceuticals, enables Ranbaxy to capitalise on opportunities in products where it currently does not have developmental capabilities. Although there are uncertainties in the US on regulatory issues (such as protein characterisation) governing biopharmaceuticals, Zenotech Labs will help Ranbaxy to gain exposure into less regulated markets of Latin America, including Brazil, Mexico, Russia and other CIS markets. Zenotech in turn can benefit from crucial know-how from Ranbaxy on obtaining USFDA approvals and financial backing for investments in new manufacturing units that are USFDA-compliant. As to the Zenotech stock, it may cool off to some extent from Wednesday’s closing price of Rs 167, with the acquisition price of Rs 160 per share now in the public domain. By virtue of this move, Ranbaxy will increase its equity stake in Zenotech from its current 6.94 per cent to 45 per cent, through a combination of a purchase from promoters and preferential allotment. This triggers a mandatory open offer by Ranbaxy to public shareholders of Zenotech at a possible price of Rs 160 per share. An interesting sidelight is that Rakesh Jhunjhunwala holds 4 per cent in the company. More Stories on : Stocks | Stock Markets | Pharmaceuticals | Ranbaxy Laboratories Ltd
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