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September, 2006 Pragati Maidan, New Delhi, India |
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Zenotech To Make A Pref Allotment To Ranbaxy
Cos looking at avenues to participate in jointly
Hyderbad-based Zenotech Laboratories will make a preferential allotment of its shares to Ranbaxy Laboratories. In a notice to the BSE, the company said that its board of directors will meet on July 17 to consider the placement of equity.
Ranbaxy fon quite some time now was evincing an interest in picking up a stake in Zenotech Labs. Jayaram Chigurupati, CEO, Zenotech Labs told a leading financial daily, “This investment will be a good strategic partnership bringing together the strengths of the two companies.” He added that the two companies are exploring avenues that they can participate in jointly.
Zenotech Labs specialises in developing and manufacturing generic biopharmaceuticals, an area that Ranbaxy does not have a significant presence in. The company’s product portfolios target niche therapy areas like oncology, anesthesiology, gynecology, and neurology.
Zenotech also has a research programme focusing on new biological entities in the areas of oncology and neurology. Hence, the investment would enable Ranbaxy to have access to a product portfolio that would be complementary to its existing portfolio.
Ranbaxy had recently signed a marketing licensing agreement with Zenotech to market generic formulations of 11 oncology products in the US and Canadian markets under its own label. The drugs will be marketed by Ranbaxy’s wholly owned subsidiary in the US, Ranbaxy Pharmaceuticals Inc. Ranbaxy has been among the more aggressive domestic companies in its inorganic growth strategy. The company has, over the past few months, invested over $500m in acquisitions.
In March, it acquired Belgium’s Ethimed, GlaxoSmithKline’s generic business Allen of Italy and Terapia in Romania. Ranbaxy seems keen on taking the inorganic strategy forward.
The company has got its shareholders’ nod for an enabling resolution to raise up to $1.5bn through appropriate securities and it has already raised $440m through foreign currency convertible bonds (FCCBs). The money is likely to deployed in funding more acquisitions. Ranbaxy’s shares closed at Rs 349.65 on the BSE on Monday, up 0.79% from the previous close.
Date: 11-Jul-2006
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