Dr Reddy’s to buy back Perlecan Pharma stake from ICICI Ventures and Citigroup
22 Jul 2008
Dr Reddy's will buy back Perlecan Pharma paying ICICI Ventures and Citigroup approximately Rs72 crore for 43 per cent equity shares. The pharma major will buy shares in the upwards Rs50 per share. Perlecan was formed in 2005 with equity capital from Citigroup Venture, ICICI Venture and DRL.This will give DRL total control of the company.
ICICI Ventures and Citigroup had invested $22.5 million between them initially, while Dr Reddy's had put in $7 million for its 14-per cent stake. The Hyderabad-base paharmaceutical firm had also transferred four new chemical entities to Perlecan Pharma, which had produced lacklustre results and both ICICI Ventures and Citigroup wanted to exit from it. Perlecan had been set up to fast-track clinical development of new chemical entities.
Dr Reddy's had hived off the company earlier and sold the demerged entity's stake for $22.5 million. The board od dr Reddy's had approved ythe deal yesterday. Once the takeover process is completed, Perlecan will cease to exist as an independent company.
Perlecan had to abandon the development of a new diabetes and obesity drug, codenamed DRL 11605. Perlecan is now left with three molecules - DRF 10945, which is targeted at metabolic disorders and is in phase II clinical trials, RUS 3108, a cardiovascular drug in phase I, and DRL 16536, an anti-diabetic drug in late pre-clinical studies.
Earlier Dr Reddy's had acquired Dow Chemical's Dowpharma Small Molecules business in the UK (See: Dr Reddy's to buy two Dowpharma Small Molecules units in the UK), and BASF's US pharmaceutical contract manufacturing business in Shreveport (See: Dr Reddy's acquires BASF's contract manufacturing business in US)
