Biocon Unit To Offer 15% Stake To Serum Institute’s Arm In A Strategic Alliance
Biocon Ltd. and Serum Institute of India Pvt. have announced a strategic alliance for vaccines and antibodies.
Under the terms of the agreement, Biocon Biologics Ltd., a subsidiary of Biocon Ltd., will offer about 15% stake to Serum Institute Life Sciences Pvt., a unit of the world’s biggest vaccine maker, at a post-money valuation of nearly $4.9 billion (Rs 36,046 crore), according to the drugmaker’s statement released on the bourses late on Thursday.
In exchange, Biocon Biologics will get committed access to 10 crore doses of vaccines per annum for 15 years, primarily from Serum Institute Life Sciences’ upcoming vaccine facility in Pune with commercialisation rights of its vaccine portfolio (including that for Covid-19) in global markets.
As part of the deal, Biocon Biologics, the statement said, will generate a committed revenue stream and related margins, commencing second half of FY23. Adar Poonawalla, chief executive officer of Serum Institute of India, will have a board seat in Biocon Biologics.
Besides vaccines, the strategic alliance will develop antibodies targeting several infectious diseases such as dengue and HIV, among others. Biocon Biologics will also, at its cost, establish a vaccine research and development division to support the alliance, and wherever possible, will make available its cell culture and sterile fill and finish capacities for vaccine production.
Biocon Biologics, the statement said, would issue shares and receive the contemplated rights through a merger with Covidshield Technologies Pvt. — a wholly owned subsidiary of Serum Institute Life Sciences. Biocon’s unit, according to an exchange filing, has approved the merger of Covidshield Technologies with itself at its board meeting held on Sept. 16, 2021.
The terms of the merger are expected to be finalised in 60 days subject to necessary approvals.
“This alliance will complement the strengths and resources of the two leading players in vaccines and biologics,” Kiran Mazumdar-Shaw, executive chairperson at Biocon and Biocon Biologics, was quoted as saying in the statement. “Our shared vision of building large-scale businesses having global impact made it a unique and synergistic value creation opportunity.”
According to Poonawalla, the objective is to address “inequitable access both in emerging and developed markets for life saving vaccines and biologics”.
Shares of Biocon closed 5.5% higher on Thursday compared with a flat Sensex.