French drug maker Sanofi-Aventis will pick up a controlling stake in unlisted Hyderabad-based vaccine maker Shantha Biotechnics,making it the first big-ticket deal in the Indian biotech sector.
Sanofis vaccine unit,Sanofi Pasteur,will acquire a subsidiary of French bioindustrial group Merieux Alliance,ShanH,which owns a majority stake in Shantha Biotechnics. The transaction,set to close before the end of the third quarter,values the Indian company at 550 million euros or $783 million (Rs 3,770 crore). A statement by Sanofi Pasteur said it will support Shanthas ongoing development as a platform to provide high quality vaccines in the international markets. Alain Merieux,chairman of Merieux Alliance,will chair the new management structure at Shanta,while founder Varaprasad Reddy will continue as managing director.
Shanta,which expects sales of around $90 million (Rs 432 crore) this financial year,has introduced Shanvac-B,the recombinant Hepatitis B vaccinethe first genetically engineered healthcare product in India. Its other products include Shantetra,a combination vaccine for diphtheria,pertussis,tetanus and Hepatitis B. The company supplies vaccines to Asia-Pacific,Africa and Latin America.
According to a Reuters report,Merieux Alliance had bought 60% in Shanta in 2006,which it later raised to 80%. Earlier this year,there were reports that both Sanofi and UKs GlaxoSmithKline were vying for control of Shantha via Merieux Alliance. According to a report by CII and consultancy firm KPMG,the Indian biotechnology sector is projected to become a $5-billion industry by 2010.
Commenting on the agreement,Sanofi-Aventis CEO Christopher A Viehbacher said Shantha would provide a portfolio of new vaccines that will complement Sanofi Pasteurs current vaccines,positioning the company to accelerate its growth in strategically important emerging markets.
Meriuex Allaince chairman Alain Merieux said in a statement: During the last three years,we have,together with Dr Varaprasad Reddy,Shanthas founder,significantly developed the company. We have in particular refocused its activity on vaccines and strengthened its range of products,especially by successfully launching a pentavalent pediatric vaccine as well as a cholera vaccine.