Shantha Bio to raise $30m from strategic investor

Company to offer 25% stake in its US subsidiary to investor

City-based Shantha Biotechnics Private Limited is slated to raise close to $30 million from a strategic investor to further phase 1 trials for its four monoclonal molecules for cancer treatment.

Shantha will be offering the strategic investor close to 25 per cent stake in its US-subsidiary Shantha West Inc, which is based out of San Diego.

K Varaprasad Reddy, managing director of Shantha Biotechnics, told Business Standard that the company was in talks with investors and a decision would soon be taken on the strategic investor.

"The four molecules have the potential to be worth $1 billion each, but it would take us at least another three years to come out with the product, if everything goes right," Reddy said.

Shantha has transferred the four molecules to its US subsidiary, where it has a 51 per cent stake. "Ghassal Shekhar, an NRI investor holds 40 per cent, while another nine per cent is held by two other investors," Reddy pointed out.

The four molecules are, according to Reddy, unique because of the fact that they would target only affected cells and the treatment would be targeted and specific.

"We would need lots of money to do phase I and phase II trials. At present, we are trying to do phase I (a) trials in Japan," he said.

The company's four monoclonal cancer molecules target cancers of the breast, lung, pancreas and colon. This apart, the company is also working on a HPV (human pappyloma virus) vaccine. "Merck is the only company that has this and it targets cervical cancer,"Reddy said.

For the first six months of the current fiscal, Shantha has posted a turnover of Rs 29 crore, as compared to last year's turnover of Rs 34 crore. The company according to Reddy was all set to record a turnover of about Rs 60 crore this year.

The company is also firming up plans to become the first bio-pharmaceutical company from India to tap the US market in 2005 with its Hepatitis-B vaccine 'Shanvac B' and AlphaFeto Protein test kit.

The company had recently tied up with US-based Spectrum Pharmaceuticals which would take care of all regulatory, marketing and distribution related issues for certain products of the company for the multi-billion generic biologicals market in the US.

Spectrum is an oncology-focused company that is developing two major anti-cancer drugs "� straplatin and elsamitrucin. The US company has also filed ANDAs (abbreviated new drug applications) for the generic drugs like ciprofloxacin, carboplatin and fluconazole.

To start with, Shantha Biotechnics is targeting its recombinant Hepatitis-B vaccine, 'Shanvac B', and AlphaFeto Protein test kit for the US market.