Shanta Biotechnics, the Hyderabad-based biotech company which was the first to make Recombinant DNA vaccine Shanvac-B and also the first to develop indigenous insulin called Shanferon, will be setting up its second manufacturing unit in the premises of its existing plant at Medchal on the outskirts of Hyderabad. The company intends to raise capital through the private placement route in the next two months. The project estimated to cost Rs 120 crore would be completed by September next year.

According to Khalil Ahmed, Executive Director of the company, the proposed unit would conform to US FDA specifications. Shanta had raised Rs 50 crore through private placement in the year 2000, offloading 6.9 per cent of its equity to SBI Caps and J M Morgan Stanley, at Rs 500 per equity share.

Shanta has already received offers from leading pharma companies and financial institutions. They are being processed by ABN Amro Bank, the company''s investment banker for the private placement. The list includes three top drug manufacturers.

The company, an Indo-Omani joint venture, expects to finalise the private placement by November. According to Khalil Ahmed, the company had signed on m+w zander, a German facility engineering and contracting firm, for the second plant, which would make Shanta''s existing product range. It would be offering contract manufacturing to pharmaceutical and biotechnology companies in India and abroad.

Shanta''s joint venture with Biocon, the Bangalore based biotechnology firm, to produce insulin, was on course and would commence production by April next year.