New Delhi: Drug maker Ranbaxy Laboratories has raised its stake in Hyderabad-based Zenotech Laboratories to 45% from the existing 7%, for Rs 214 crore.

Ranbaxy has bought 22% stake from the subsisting promoter and MD of Zenotech, Dr. Jayaram Chigurupati, and the remaining 16% via preferential allotment of shares. Both valued at Rs 160 each share, which will cost Ranbaxy Rs 214 crore. Ranbaxy will raise funds for the buyout through a mix of internal accruals and debt.

The buy out will offer Ranbaxy direct access to biosimilar and oncology sectors, which are the two key drugs sections where the Indian pharma major did not have a presence. The worldwide market size for biosimilar is about $65 billion whereas the oncology market is valued about $35 billion.

Zenotech’s shares at the BSE closed at Rs 167.30, up 10% from its last closure of Rs 152. Ranbaxy’s shares remained down 0.5% and closed at Rs 438.60 as compared to its Tuesday’s close of Rs 441.

Malvinder Singh, Ranbaxy CEO, said, “The strategic partnership will help Ranbaxy to significantly enhance its product portfolio in niche segments which has high growth opportunities. The increasing importance of biologics in the global pharmaceutical industry and the opening up of the generic biologics in the regulated market makes it opportune for Ranbaxy to enhance its presence in this area.”

With Zenotech, Ranbaxy also plans to start introducing various products in the niche oncology and biosimilar marketplaces soon. Ranbaxy plans to bring 6-7 special injectable oncology drugs in 2008-09 in the United States. The company also plans to launch biosimilar drugs in EU markets by 2010-2011.

“Zenotech has one of the best biosimilar pipelines globally which is worth $23 billion. We will start launching biosimilars in emerging and developing markets and later to the regulated markets in the EU and the US,” Mr Singh added.

Zenotech also has a pipeline of 7 biosimilar drugs at different development stages.