Shantha Bio to raise $30m for trials

City-based Shantha Biotechnics Pvt Ltd is slated to raise close to $30 million from a strategic investor to further Phase I trials of 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, based in San Diego, California.

"Ghassal Shekhar, an NRI investor holds 40 per cent (in the US subsidiary), while another 9 per cent is held by two other investors," K Varaprasad Reddy, managing director of Shantha Biotechnics, told Business Standard.

He added 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.  The molecules are, according to Reddy, unique because they would target only the affected cells and treatment would be very specific.

"We would need lots of money to do Phase I and Phase II trials. At present we 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. Shantha is also working on a HPV (human pappyloma virus) vaccine. "Merck is the only company which 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 (Rs 290 million), compared with last year's turnover of Rs 34 crore (Rs 340 million). The company according to Reddy was all set to record a turnover of about Rs 60 crore (Rs 600 million) 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 the 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 biological market in the US.

Spectrum is an oncology-focussed company, which 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.