The Sydney-based biopharmaceutical company, SciGen Limited, has expanded its partnership with its Indian counterpart Shreya Group with its agreement to place 5 per cent of issued capital to Shreya by mid October 2004. In addition, SciGen will make a 1 for 4 non-renounceable rights issue to be offered to all SciGen shareholders (including Shreya post-placement) at 6 cents per share.
Its 5 per cent of (22 million) shares will be given to Shreya (Initial placement) at an offer price of 7 cents per share.
According to an official release, the directors of SciGen Limited (SciGen) announced that an agreement has been reached to expand its important strategic relationship with the progressive international biopharmaceutical and pharmaceutical company Shreya Group (Shreya) which has operations in India and Russia.
SciGen's current major shareholders, SciTech Genetics Pte Ltd and Sonic Healthcare Limited (which currently hold in aggregate approximately 37.5% of SciGen) have both indicated that they would be taking up their entitlement to the rights issue.
To the extent that Shreya's shareholding after the Initial Placement and rights issue is less than 24 per cent, SciGen has undertaken to place additional shares with Shreya (Final Placement) at the rights issue offer price to bring its shareholding up to 24 per cent of the expanded capital, subject to shareholder approval.
As an adjunct to the rights issue, it is intended that SciGen shareholders holding unmarketable parcels (less than A$500 in value) who take up their rights will also be provided with the opportunity to top up their holdings to marketable parcels.
The Initial and Final Placements and rights issue will raise a minimum of a $11.2 million and a maximum of A$16.4 million, depending on the level of subscription to the rights issue by SciGen shareholders.
The essential terms of the placement agreements have been agreed with Shreya and these documents will now be executed as soon as practicable. It is proposed that shareholder approval for the Final Placement be sought at the company's AGM on 22 November 2004. If approved by shareholders, the Final Placement will be completed by end of January 2005, the release added.
Shreya's chairman Sujit Kumar Singh and director Ajit Bhaskar will also be invited to take up seats on the SciGen Board on completion of the Initial Placement and execution of the placement agreements.
Paul Freiman, chairman of SciGen said, "This is a geometric expansion of our existing strategic partnership between SciGen and Shreya. SciGen has a well established presence in the Asia Pacific region and has a robust portfolio of products. SciGen's ability to commercialise key products in the region has been clearly demonstrated over the past two years."
"Shreya is a well established pharmaceutical and biopharmaceutical company with a growing global presence and annual turnover of US$500 million. The financial support this transaction brings is expected to be sufficient to fund SciGen through to a cash flow and earnings positive position. In addition, the cash injection will enable SciGen to explore not only new product licensing opportunities, but also to look to new and competitive formulation and delivery systems as well as examine clinical development opportunities to extend the competitive position of SciGen's existing portfolio," he added.
"We have the opportunity with this transaction to create a "virtual" fully integrated biopharmaceutical organisation. SciGen will gain access to the R&D partnerships established by Shreya; it further secures the manufacturing relationship SciGen already has with Shreya's US$20 million biotechnology manufacturing facility being built near Mumbai and it will provide for leverage of each party's expertise in regulatory affairs, scientific affairs, sales, marketing and distribution. This expands SciGen's and Shreya's shared horizons significantly," Freiman said.
Mr Sujit Kumar Singh, chairman of Shreya Group said, "We are very excited about further developing our strategic relationship with such a great company as SciGen. It has demonstrated over the last two years that it has the capacity to establish deals and achieve commercial success for its products. Shreya's well established position and expertise in sales, marketing, manufacturing and distribution will be available to SciGen to further grow the company."
Shreya and SciGen already have a commercialisation agreement in place for SciGen's products in India. In addition, as previously announced, Shreya is building a new US$20 million biotechnology manufacturing facility at Pune near Mumbai, which will be able to manufacture SciGen's products. Initially SciGen's products will be the only products manufactured in this facility through the contract manufacturing agreement previously entered into between the two companies.
SciGen has acquired the rights to manufacture, distribute and market biopharmaceutical products under exclusive licensing arrangements.
SciGen is a Singaporean biotechnology company, publicly listed on the Australian Stock Exchange (ASX code SIE). SciGen's headquarters is in Singapore and it also has offices in Australia, USA, Korea, Vietnam, Hong Kong and Philippines and partners in India, China, Indonesia, Israel, Poland and the Netherlands.
Shreya has business operations in Russia, India, Africa and the CIS countries. The Shreya Group manages its businesses from Russia and India. The company has recently established a presence in the United Kingdom as a base for future operations in Europe. Shreya today is the third largest marketing & distribution company in Russia with its financial year 2003 turnover at US$427 million.