Industry sources said that if the two collaborators bypass the German Remedies' marketing channel, the company would essentially be dependent on the product pipeline of the largest shareholder, Asta Medica. Officials at German Remedies, however, did not wish to comment on the issue.

A clutch of five German multinationals controls almost 37 per cent of the Rs 167-crore German Remedies' equity, with Asta Medica (along with Heller GmbH) holding close to 21 per cent of the equity. The other collaborators -- Beecham Wulfing GmbH, Boehringer Ingelheim, Chemiewerk Homburg and Schering AG are believed to be holding between three per cent andsix per cent of German Remedies' equity capital, respectively.

Currently, German Remedies markets over 12 Schering products and more than seven products of Boehringer Ingelheim. These include Dulcolax (a laxative), Mexitil (antiarrhythmic) and Buscopan (an antispasmodic) from the Boehringer stable and Kanormal (a bulk laxative), Progynon depot (an oestrogen supplement) and Triquilar (an oral contraceptive) from the Schering basket.

The existing brand manufacturing and marketing arrangement is, however, unlikely to be disturbed immediately, though speculation is rife over chances of yet another change in the pattern of equity holding of key collaborators of German Remedies.

In 1996-97, Asta Medica acquired the entire 4.6178 per cent equity held by Nordmark Arzneimittel, while Beecham Pharma divested half of its shareholding in German Remedies (amounting to 2.2103 per cent) to Asta Medica.

Analysts said that unless one collaborator acquires a distinct majority in German Remedies, this "uncertainty" willcontinue to affect the company's valuation. The German Remedies scrip, however, moved up eight per cent to touch Rs 596.85 on the NSE even as marketmen attributed the growing interest to chances of an acquisition by a leading British multinational, possibly Glaxo, or a reshuffle in the collaborators's holding. Glaxo India's spokesperson, however, maintained that as a policy the company did not comment on rumours.

Meanwhile, German Remedies is expected to receive processing income of around Rs 7 crore to Rs 8 crore in 1998-99 from Madaus AG for the manufacture of certain products at its facility in Goa. These earnings are expected to move up once the plant receives US FDA approval.