Shantha Biotechnics in talks to divest stake

The Hyderabad-based Shantha Biotechnics, a Rs 90 crore biotechnology company, is in talks with potential investors to offload a strategic stake.

Varaprasad Reddy, managing director, said, "We are in negotiations with a few investors who will not only provide funding but will contribute towards technology and marketing as well. We have not yet closed in on any deal."

Reddy said the amount of funds to be raised and equity to be offloaded would depend on the type of investor.

"If the investor can contribute significantly towards our company, we would not mind offloading even 50 per cent stake," he added.

In the initial years of operation, the company had received some investment from H E Yusuf Bin Alawi Abdullah, foreign minister of Sultanate of Oman.

He had invested money in his personal capacity and had also arranged for long term loans from Oman International Bank at low interest rates.

Meanwhile, Shantha Biotechnics is eyeing a turnover of around Rs 130 crore this year, of which approximately Rs 20 crore would come from contract development and manufacturing.

"We already have orders worth around Rs 5 crore in this area and see it emerging as a good opportunity for us. In the future, we could even get 50 per cent of our revenues from this stream," Reddy said.

Shantha Biotechnics will be coming out with new products like DTP+ Hep B+ Hib pentavalent vaccine and a tissue plasminogen activator, which is basically a medication used to dissolve blood clots, by the year-end. Also on the cards are vaccines for rubella, mumps, rotavirus, cholera and typhoid.

Shantha Biotechnics also has a technical collaboration with city-based Centre for Cellular and Molecular Biology, wherein the focus is on evolving an expression system which will typically help in developing more products. "It will basically be a launchpad for products," Reddy said.

The company invests approximately 25 per cent of its revenues on research and development.