To pay Rs 17 cr for intellectual property, land.

Mumbai: Piramal Healthcare Ltd has signed an agreement to acquire BioSyntech's assets for a consideration of C$ 3.9 million (an estimated Rs 17 crore).

For Piramal Healthcare, which about a month ago sold its domestic formulations business to Abbott for Rs 17,000 crore, the BioSyntech deal is “strategic”, explained Dr Swati Piramal, since it marks a definite foray into biotechnology.

BioSyntech is a medical device company specialising in developing, making and commercialising advanced bio therapeutic thermogels for regenerative medicine (tissue repair) and therapeutic delivery.

Its platform technology is a family of hydrogels called BST-Gel, some of which are liquid at low temperature and solid at human body temperature.

These gels can be injected or applied to a specific local site and offer beneficial properties for the local repair of damaged tissue such as cartilage, bone and chronic wounds and provide the benefit of avoiding invasive surgery, the note explained.

The technology is beneficial, where oral delivery of promising drugs have limitations like instability in the digestive tract, she explained. The gel could be used in arthritis, Dr Piramal said, adding that the technology platform could be leveraged in other segments too.

BioSyntech's lead, late-stage product, BST-CarGel is at present undergoing international pivotal trial, the note added.

Stake

The Piramal group had acquired 17 per cent equity in BioSyntech in FY2006, for Rs 22 crore. Through this investment, Piramal had exclusive marketing rights for the marketing, sales and distribution of current and future products of BioSyntech, for India and some neighbouring Asian markets.

It was also able to have a representative on BioSyntech's board – Piramal group's head of research Dr Somesh Sharma has been on their board for about five years, Dr Piramal said.

Piramal Healthcare will pay Rs 17 crore for Intellectual Property, land and building, while another Rs 35 crore will be paid towards completing clinical trials, etc up to June 2011, she said, adding that the funding was through internal accruals.

BioSyntech has been unable to raise further capital to fund its ongoing operations and to repay maturing debt. As a result, BioSyntech sought court protection under insolvency proceedings.

Taking into consideration Piramal Healthcare's interests in the projects of BioSyntech – Piramal Healthcare made a binding offer and the Superior Court of Quebec (Canada) allowed the Interim Receiver to accept this offer, a Piramal Healthcare note said.

The company's shares closed at Rs 491.25, up 0.38 per cent on the BSE.