The Hindu Business Line : Nicholas Piramal seals private placement in Canadian biotech co

THE Mumbai-based drug major Nicholas Piramal India Ltd (NPIL) said on Tuesday that it has completed the private placement of 7,500,000 common shares at a price of Canadian $0.80 per share in Canadian biotech company BioSyntech.

NPIL's post-issue shareholding will be approximately 17 per cent of BioSyntech's issued shares, the Indian drug company said in a communiqué here today.

The company had announced the deal in July this year and would fork out about Rs 23 crore towards acquiring the stake.

In accordance with the rules of the TSX Venture Exchange, Canada, the shares issued to NPIL will be subject to a minimum holding period of four months.

Further, in accordance with the agreements entered into by the two companies, NPIL has nominated its Chief Scientific Officer, Dr Somesh Sharma, to be its representative on the board of directors of Biosyntech.

The financing by NPIL gives BioSyntech sufficient funds to reach all the targeted clinical trial milestones for fiscal year 2006, including BST-CarGelâ, BST-DermOnTM and BST-InPodTM, for cartilage regeneration, wound healing activation and fat pad reconstruction for heel pain, respectively.

The agreement also gives NPIL exclusive rights for marketing, sales and distribution of current and future products of BioSyntech for India, Pakistan, Sri Lanka, Bangladesh, Laos, Cambodia, Vietnam and the Philippines.

The companies have agreed to also explore collaboration opportunities for research and development activities with respect to future products of NPIL using BioSyntech's technological platforms.

The agreements provide that for so long as NPIL shall be the registered holder of at least 5,000,000 shares of BioSyntech, the board of directors of BioSyntech shall include representatives of NPIL in proportion to its shareholding, subject to a minimum of one director, the NPIL note said.

In addition, NPIL will have proportional pre-emptive rights in the event the company offers further equity securities and, until February 23, 2006, a veto right over issuances of shares below CDN$0.80.

The agreements also confer on NPIL certain right of first refusal, piggyback rights and drag along rights.

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