Orchid plans to sell 15-20% stake in research unit

Orchid Chemicals & Pharmaceuticals (Orchid) is considering selling stake in its research subsidiary by next year.A strategic investor may also be considered for Orchid Research Laboratories.However, before the fund-raising, Orchid plans value addition through work on molecules.

Orchid Research operates in four therapeutic areas — diabetes, pain, oncology and infectious diseases — at its two R&D centres at Sholinganallur and Irungattukottai in Chennai.The therapeutic areas have lead molecules which will go into trials by next year.

This would be the value-add after which Orchid Research would look at generating funds to meet the demands of the molecules, Rao said.Hence, putting a number on the amount of funds raised would be premature now.
The company currently invests 5-6% of its revenue every year for research and development, which was Rs 60 crore last year.

Morgan Stanley picks up stake in Orchid for Rs 9 cr

Morgan Stanley and Co International has acquired 3.30 lakh shares of Orchid Chemicals at a price of Rs 269.83 each in a bulk deal at the BSE, information available on the exchange showed.

The latest acquisition of Orchid Chemicals shares come on the heels of speculations of its takeover from a Ranbaxy promoter group firm.

Earlier, Solrex Pharmaceuticals, a privately-held firm, picked 14.7 per cent through a slew of block deals in Orchid Chemicals taking it very close to triggering an open offer and making Orchid, in which promoters have less 16 per cent stake, vulnerable to a hostile takeover bid.For the quarter ended March 31, 2008, the promoters held 15.87 per cent stake in the firm.

No hostile intentions on Orchid: Malvinder

In a new twist to the Ranbaxy-Orchid takeover drama, Ranbaxy Laboratories CEO Malvinder Singh on Wednesday said his company had no hostile takeover intentions.For the third day in succession, Mr Singh, however, declined to comment on the relationship between Ranbaxy Laboratories and Solrex Pharmaceuticals, the company that has mopped up 12% in the Chennai-based Orchid Chemicals from the secondary market.

However, if Mr Singh’s statement is taken on face value, it means that the threat of a hostile takeover of Orchid has receded for now. It is unlikely that with a 12% stake, Ranbaxy Laboratories or Solrex will be content with being just a financial investor in Orchid.

The buzz on the Street is that Ranbaxy will engage in discussions with the Chennai-based drugmaker for an amicable takeover or some sort of strategic alliance, which could include a contract manufacturing tie-up.

Mr Singh declined to comment on whether the company plans to buy more Orchid shares or strike an alliance with it. When asked to react to Mr Singh’s statement that India’s largest drugmaker has no hostile takeover intentions, Mr Rao said: “I don’t have any comment to offer at this point in time. I cannot share my strategy at this stage.

Read more in The Economic Times article.