Mumbai: Drugmaker Panacea Biotec Ltd has acquired a majority stake in privately-held Umkal Medical Institute to set up a 220-bed hospital in the National Capital Region, marking its foray into healthcare services.

Under the deal, Panacea will take about 75 per cent in Umkal Medical Institute, investing Rs60 crore to Rs80 crore.

Panacea Biotech plans to fund the acquisition through a mix of debt and equity. Umkal had already invested in the land and would provide the knowledge support.

''Entering into private healthcare is an integral part of our strategy to become a leading health management company,'' Rajesh Jain, joint managing director of Panacea Biotec, said.

The company has signed a shareholder's agreement with the existing shareholders of UMI and has decided to make investment towards its equity contribution, the release added.

''The potential market for the corporate hospital would comprise of the very rich, consuming class and a part of climbers, which would be close to 25 to 30 per cent of the healthcare market,'' Jain added.

Panacea Biotec is currently involved in research, manufacturing and marketing of health products and vaccines and holds 24 product patents. 

''Our rate of innovation should go up significantly and the kind of molecules which we will be able to bring to the market will be much closer to what the patient needs," said Jain.

The hospital is expected to start functioning by January 2010 and would see break-even in 3-4 four years hence, Jain added.