Reliance Life Sciences acquires 74-per cent stake in UK's GeneMedix
08 February 2007Mumbai: Reliance Life Sciences Ltd., a unit of Reliance Industries has acquired 74 per cent stake in GeneMedix Plc, the London, UK-based biotechnology company, for £14.6 million ($28.8 million), the company said in a statement.
The acquisition was effected through subscription to 1,168 million shares of GeneMedix at 1.25 pence a share, the statement added.
Shareholders of GeneMedix, which is listed on the London and Singapore stock exchanges, have approved the acquisition at an extraordinary general meeting of the company on January 12, 2007 at its headquarters at New Market, UK.
This is the first-ever, overseas acquisition of a listed biopharmaceutical company by an Indian company.
The deal also includes a five-year warrant option for Reliance Life Sciences for a further acquisition of 1,404 million shares at 1.25 pence/share to enable infusion of an additional £17.5 million, which would take the shareholding of Reliance Life Sciences in GeneMedix to 86 per cent.
The acquisition provides an opportunity for Reliance Life Sciences to enter the European biopharmaceutical market by leveraging its wide portfolio of therapeutic proteins under development with a complementary product portfolio and facilities for manufacturing and clinical trials facility of GeneMedix.
Reliance Life Sciences, which recently entered the Indian market with five plasma protein products, has several other products under development in the plasma proteins, biosimilars, novel proteins, monoclonal antibodies and siRNA molecules.
It operates a pilot-scale biopharmaceutical manufacturing facility in Mumbai to manufacture plasma proteins and recombinant proteins.
Reliance Life Sciences is building three commercial scale facilities at its Navi Mumbai to manufacture recombinant proteins, as well as plasma proteins. These facilities would be operational in the year 2007.
For GeneMedix, the acquisition provides the much needed funds for clearing debts and supporting product development of its lead biosimilars - erythropoietin (EPO) for the European market, access to Reliance Life Sciences pre-clinical, clinical and bioanalytical capabilities and the commercial scale manufacturing facilities of Reliance Life Sciences in Navi Mumbai.
Genemedix has already started clinical trials in Europe for EPO, its first biosimilar product. EPO stimulates red blood cell production and is used mainly by chemotherapy and chronic renal failure patients. Another product, granulocyte colony stimulating factor (GCSF), which stimulates white blood cell production, would be entering clinical trials later this year. GCSF is used mainly as an adjunct treatment with chemotherapy for cancer patients.
EPO and GCSF have a global market estimated at $10 billion and $3 billion respectively. Reliance Life Sciences plans to introduce EPO in India, following concurrent clinical trials in India.
The European Union has published guidelines for regulatory approval for biosimilars and the US is expected to follow suit in the near future.