Strides’ Biopharma Unit Completes $195-Million Fund-Raise

Stelis Biopharma Pvt.—the vertically integrated biopharma unit of Strides Pharma Science Ltd.—has raised $195 million in two rounds.

Stelis will now be valued at $350 million, Strides Pharma said in an exchange filing.

As part of its Series B fund raise, Stelis raised $70 million from existing investors through partly paid shares at a pre-money valuation of $155 million. This funding round was led by the family office of the promoters with a $56 million commitment, of which $15 million will be invested immediately while Strides will subscribe to the remaining $14 million.

The company raised $125 million in a series C funding round, including a primary infusion of $85 million in the company and a secondary placement of $40 million for its existing shareholder—GMS Holding. This funding round was led by TPG Growth and other long-term investors like Route One, Think Investments and the Mankekar family.

Proceeds of the fund raise will be used to complete the last-mile capex for the company’s contract development and manufacturing business, ramp-up of process development lab and other technical capabilities. The funds will also be used to service debt and accelerate vaccine block infrastructure, according to the company’s statement.

“With the current capital raise, Stelis is now well positioned to pursue its growth initiatives and scale its business model to deliver promising returns in the coming years,” the company said.

Strides will now hold 33% in Stelis post its series C fund raise, with its investment valued at $116 million.

In February this year, the company announced it will demerge and list its biotech business under Stelis Biopharma in the next 12 months. Former managing director of HDFC Bank Ltd., Aditya Puri, was announced as chairman of the Stelis board. The company, in an exchange filing, had then said Stelis is expected to break-even in FY22 and will need up to $100 million to fund all its programmes over the next three years.

In a note dated March 4, JM Financial said the demerger of Stelis may be a key near-term catalyst for Strides. “Stelis’ CDMO (contract development and manufacturing organisation) division is now expected to start contributing meaningfully with the company expecting Stelis’ operations to achieve breakeven by H2FY22,” the note said.

Shares of Strides Pharma fell as much as 4% to Rs 742.3. The stock is down for the fourth straight day, trading at the lowest level in nearly four months.

According to Bloomberg, out of the seven analysts that track the stock, six have a ‘Buy’ rating and one suggests ‘Hold’. Based on the 12-month Bloomberg consensus data, the stock has a return potential of 32.6%.