Ranbaxy Laboratories Ltd has signed a definitive agreement with Zenotech Laboratories Ltd (Zenotech), providing for an increase in equity stake by Ranbaxy from its current 7 per cent to 45 per cent at a price of Rs 160 per share aggregating to Rs 214 crore.

This involves purchase of shares from the existing promoters and preferential offer to Ranbaxy by Zenotech.

The above triggers a mandatory open offer by Ranbaxy to other shareholders of Zenotech, at a price of Rs 160 per share or as determined by SEBI regulations.

Post the offer, the existing promoter group of Zenotech will have a 25 per cent stake in its expanded equity capital. Dr Jayaram Chigurupati shall continue as the managing director.

Speaking on the development, Malvinder Mohan Singh, CEO and MD, Ranbaxy, said, "The increasing importance of biologics in the global pharmaceutical industry and the opening up of the generic Biologics in the regulated markets, makes it opportune for Ranbaxy to enhance its presence in this area. Specialty injectables, that include oncology products, constitute an attractive segment that underpins our strategic intent. Having worked with Zenotech for almost two years, we believe that this investment and partnership provides a strong platform for us to leverage these opportunities".

Zenotech has received three Indian approvals for oncology biopharmaceuticals i.e. 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 further seven Biopharmaceutical products in different stages, all developed in-house. It has state-of-the-art manufacturing facilities in Hyderabad, India, while its R&D facilities are in Hyderabad and New Jersey, USA.

Presently, the global biopharmaceutical market is valued at app USD 65 bn at innovator prices and Zenotech's pipeline addresses a third of this market. The global oncology market is worth over US $ 35 bn and is considered among the fastest growing therapeutic segments globally. Specialty Injectables are a high value addition segment, compared with orals and Ranbaxy plans to file seven US ANDAs from Zenotech facilities in the coming few months.