Dr. Reddys to increase its stake in the company

Domestic pharma major Dr Reddy's Labs has said that a promoter group firm Dr Reddy's Laboratories Holdings Pvt Ltd has increased its stake in the company to 22.82 per cent through open market purchase.Dr Reddy's Holdings Pvt Ltd acquired 1,95,348 equity shares representing 0.11 per cent stake in the company through open market transactions, Dr Reddy's Labs said in a disclosure to the Bombay Stock Exchange.

The market purchase of shares, for an amount of about Rs 11.36 crore, was conducted through DSP Merrill Lynch.However DSP Merrill Lynch has no stake in Dr Reddy's Holdings Pvt Ltd.

Pursuant to the acquisition, the holding company's stake in Dr Reddy's Labs has increased to 22.82 per cent.At the end of June, Dr Reddy's Holdings held 22.46 per cent stake in the company.

Dr Reddy's to buy BASF drug contract manufacturing unit

Drugmaker Dr Reddy's Laboratories Ltd has agreed to acquire BASF's drug contract manufacturing business and a related facility in the United States for an undisclosed amount.

The Hyderabad-based company said the deal was likely to be completed by June, subject to regulatory approvals. BASF's contract manufacturing business makes generic prescription and over-the-counter products for branded and generic companies in the United States.

The business had revenue of $43 million in 2007, it said. "The acquisition ... will enable us to strengthen our supply chain for North America and provide a strong platform for pursuing additional growth opportunities," Satish Reddy, managing director of Dr Reddy's, said in the statement.

Dr Reddy's to acquire part of Dowpharma business

Dr Reddy's Laboratories has entered into a definitive agreement with Dow Chemical Company to acquire a portion of Dowpharma Small Molecules business associated with its United Kingdom sites in Mirfield and Cambridge.

The financial terms and conditions of the transaction are not being disclosed at this point in time. The transaction is scheduled to close on April 30, 2008 pending regulatory approval.

The acquisition will include the relevant business, customer contracts, associated products, process technology, intellectual property, trademarks as well as the transfer of the facilities at Mirfield and Cambridge in the UK. The two sites and the business employ around 80 people. Dr. Reddy's will also have a non-exclusive license to Dow's Pfenex Expression Technology for biocatalysis development.

ICICI Ventures may exit Dr Reddy's R&D unit

ICICI Venture Funds and Citigroup Venture Capital are likely to pull out their investment in Dr Reddy’s Laboratories’ drug research company, Perlecan Pharma, on concerns over the commercial viability of its experimental drugs. The two investors have begun talks with Dr Reddy’s to sell their stake for their initial investment of $26 million plus interest.

Perlecan Pharma started in September 2005 with four new chemical entities from the Dr Reddy’s stable and has the first right of refusal for further discoveries by the Hyderabad-based company. However, the company this year abandoned the development of a new drug code-named DRL 11605, aimed at treating diabetes and obesity. Perlecan’s pipeline is now left with three molecules: DRF 10945, a molecule targeted at metabolic disorders, currently in phase II of clinical trials, RUS 3108, a cardiovascular drug in phase I, and finally DRL 16536, an anti-diabetic drug in late pre-clinical studies.

Read more in The Economic Times article.

DRL to bid for US-based Bradley Pharma: Srcs

Dr Reddy's has moved one notch closer to buying out US based generic drug maker Bradley pharma but, a few other big players pose a challenge to the deal.

The battle for US based generic drug maker Bradley pharma is intensifying. The Indian challenge is from Dr Reddy's Labs, which is learnt to have moved into, round two of the bidding process. Bradley’s product portfolio includes a few high profit margin dermatology products and that’s expected to benefit Dr Reddy's. But, that portfolio has attracted attention from Archimedes Pharma and Nycomed. Archimedes is a company promoted by private equity giant Warburg Pincus while Nycomed has the backing from Blackstone.

Read more in The Moneycontrol article.

Indian drug makers eye US firm Par Pharma

Sun Pharmaceutical Industries, Ranbaxy Laboratories, Lupin Ltd and Wockhardt Ltd were named as potential bidders by the Times of India and the Economic Times who are in the race to acquire US-based generic drug maker, Par Pharmaceutical Co Inc.

The Times of India, citing unidentified sources, said Ranbaxy and Dr Reddy's Laboratories had withdrawn from the race after showing initial interest in the US generics firm, which is valued at about $700 million.The Economic Times said Ranbaxy may be the front runner.

The spokeswoman for Dr Reddy's said the company was never interested in Par Pharma, while the spokesman for Ranbaxy declined comment.Lupin, Wockhardt and Sun Pharma also declined comment.

Ranbaxy, India's top drug maker by sales, said last month that the United States was one of the regions where it was seeking an acquisition.

Bulls reign to push Nifty above 4200

Heavy buying interest in frontline stocks propelled key indices to close in the positive. Banking stocks continued to lead the advances followed by cement stocks. Bajaj Auto plunged 9% on the demerger news and disappointing Q4 results. Tata Steel's impressive performance in the March quarter pushed the stock up 1.5%.

The BSE Sensex closed 172 points or 1.22% up at 14,299. The NSE Nifty was up 39 points or 0.92% at 4219. BSE Midcap Index was up 0.65% at 6,080 while the Smallcap Index slipped 0.01% to close at 7205.

Of a total of 2,676 shares traded on the BSE today, 1,241advanced, 1,355 declined and 80 were unchanged.

State Bank of India, up 3.47% at Rs 1,329, Reliance Industries, up 3.15% at Rs 1,685, Dr Reddy's Laboratories, up 2.21% at Rs 678 and Tata Motors, up 2.05% at Rs 750, were the major gainers on the Sensex.

Banking stocks continued to rally upward with SBI and ICICI Bank in the lead. HDFC (up 0.71%) and HDFC Bank (up 0.23%) gained on account of expectations of the merger of the two entities.