Ranbaxy CEO and managing director Malvinder Singh (right) with Zenotech managing director Jayaram Chigurupati in New Delhi on Wednesday. Picture by Rajesh Kumar

New Delhi, Oct. 3: Ranbaxy will increase its stake in generic biopharmaceuticals maker Zenotech Laboratories to 45 per cent at a cost of Rs 214 crore.

The company will also make an open offer for another 20 per cent of the floating stock.

Biopharmaceuticals are drugs produced by applying biotechnology.

The stake hike will be through the purchase of shares from Zenotech’s promoters.

The Hyderabad-based company will also make a preferential issue to Ranbaxy.

The acquisition gives chief executive officer Malvinder Singh control over research and production of drugs based on biotechnology. These drugs are harder to manufacture than conventional medicines.

Singh said, “The increasing importance of biologics in the global pharmaceutical industry and the opening up of the generic biologics in the regulated markets make it opportune for Ranbaxy to enhance its presence in this area.”

The company will acquire the shares at a maximum price of Rs 160 per share for an amount not exceeding Rs 214 crore.

The drug maker holds a 7 per cent stake in Zenotech. It wants to buy 22 per cent from the promoters, which includes CEO Jayaram Chigurupati, and another 16 per cent in preferential stock.

Ranbaxy will make an open offer to buy an additional 20 per cent from investors under stock exchange takeover rules, it said.

Zenotech has two biotechnology-based cancer treatments in the country and is developing another eight.