With a SEBI-registered FII proposing to join hands with the promoters of Transgene Bioteck on long-term basis, the company has decided to delist its shares.
The FII, whose name was not disclosed will support the company’s drug discovery activity in exchange for equity participation and certain rewards on drug licensing or sale. One of the pre-condition for this transaction is that the stock of Transgene Biotek is delisted from all the Indian stock exchanges.
The board of the Hyderabad-based company recommended the wish of the promoter’s to delist the shares of Transgene Biotek at an exit price not lower than the floor price of Rs 25 determined in accordance with the delisting regulations.
Director’s disclosure
In a disclosure to the BSE, the Managing Director of the company, K.K. Rao, said in the event the delisting efforts are successful, the new management will enjoy enhance flexibility and help in speeding up drug development process. The new management may choose to increase exposure to the western markets (besides Luxembourg) at opportune time.
The research and development driven company said it sees potential on two drug platforms. The animal studies on oral insulin have yielded encouraging results. This will lead us to a strategic partnership with a large pharma company and reward it for its pioneering work on diabetes, he said.
One of the first Indian companies to get license to manufacture hepatitis B, Transgene’s core focus is developing novel molecules and drug delivery technologies in the biotechnology sphere. It is capital-intensive and requires longer development times.
Transgene promoters do not believe that the value of the pipeline and its intellectual property is reflected in the value of the company. Despite pioneering work and IP, there is a continuous erosion in company’s value accompanied by perceived investor pessimism. In view of this, the promoters have taken this step of delisting and brining in an FII, the disclosure said.