Zenith Pharmaceuticals, the single largest shareholder in Bangalore-based drug-maker Strides Arcolab Ltd, is offloading stake in the company. Zenith belongs to Symphony Capital Partners, which was formerly Schroder Capital.
The bulk deals data from the exchanges suggests that Zenith has sold two million shares of Strides Arcolab for Rs. 47.1 crore, bringing down its stake to 26% from 31%, earlier. This is possibly the biggest paring of exposure by the fund in Strides in recent quarters.
VCCircle finds that they probably invested in Strides Arcolab sometime in January 2002.
Data shows Zenith had offloaded shares in early 2008 when it pared stake from a little over 35% to 31.9%.
Speculation has been building about Zenith offloading shares in the Bangalore-headquartered pharma company, as the stock climbed to a 52-week-high of Rs 268 last week. This followed the news of an agreement between Pfizer and Strides Arcolab to sell its off patent cancer medicines in the US.
Analysts have been broadly positive on the arrangement with Pfizer, which clinched similar generic drug marketing deals with several Indian firms like Aurobindo Pharma and Claris Lifesciences. Aurobindo stock had seen a similar rally following the announcement of a deal with Pfizer in early 2009.
The run up in the stock price provided a window of opportunity for Symphony, which has stayed invested in the company for eight years now. Symphony through Zenith has been waiting for a strategic buyer to show up at Strides ever since a proposed merger with mid-sized pharma peer Matrix Laboratories was called off in 2005.
Strides Arcolab has had several M&A dialogues in the interim, and is currently in the markert for roping in a financial investor in the specialty pharma (sterile injectables) and R&D operations.
Strides Arcolab manufactures a range of generic drugs and tablets. The company is among the top 5 softgel capsule manufacturers with 12 global plants in USA, Mexico, Brazil and India. Strides Arcolab closed at Rs. 250 on the stock exchange, up 4.5% on Thursday.