NEW DELHI :
Indian biopharmaceutical major Biocon Biologics on Monday said that private equity fund True North will acquire a 2.44% stake in the company for ₹536.25 crore, or around $75 million.
The infusion of fresh equity will happen at a valuation of around ₹21,450 crore, or about $3 billion.
The fund infusion by True North is part of a $200-300 million round the company plans to raise over the next few months, chief financial officer M.B. Chinappa said in an interview.
It is also the first equity dilution by parent Biocon Ltd since the biologics business was hived off last year.
Biocon Biologics is in talks with several private equity firms interested in acquiring a minority stake in the company, Chinappa added.
The True North stake acquisition is expected to complete after the company’s internal restructuring, including the merger of Biocon Research with Biocon Biologics, as per a company release.
“It (the funding) will enable the expansion of our R&D (research and development), manufacturing and also the expansion of our commercial footprint across the world," he said.
The fundraising is a precursor to by Biocon Biologics’ initial public offering which, Chinappa said, is expected within the next two years.
On Monday, Biocon Biologics also announced the appointment of Chinappa as its CFO. He was earlier the CFO and president (finance) of another Biocon subsidiary, Syngene International.
The Kiran Mazumdar Shaw-led Biocon had hived off its biosimilars division into Biocon Biologics in March 2019. The subsidiary, with its own dedicated management, looks at development, manufacturing and commercialization of the biosimilars business.
“True North has been a committed investor in both Biocon and Syngene prior to listing. This investment is an endorsement of the value that Biocon Biologics has demonstrated as a global biosimilars player, having commercialized three of its molecules in developed markets like EU, US, Japan and Australia" Biocon chairperson and managing director Mazumdar-Shaw was quoted as saying in a release.
With a product pipeline of 28 molecules, including 11 with Mylan and several others with Sandoz, the biologics arm aims to achieve an annual sales target of $1 billion by 2021-22. It reported sales of ₹1,006 crore, or approximately $140 million, for April-September, up 63% year-on-year.
Apart from its 28-product pipeline, the biologics subsidiary also has plans to supply recombinant human insulin to diabetes patients at less than 10 cents per day, roughly one-third of the existing prices.
The company is in talks with governments of many low-to-middle income countries for its affordable insulin access programme, Biocon Biologics CEO Christiane Hamacher said in an interview.
Biocon Biologics had recently launched the biosimilar for trastuzsumab, Ogivri, in the US, as well as pegfilgrastim biosimilar Fulphila, in July 2018.
Hamacher said it will focus on the US and China, the two biggest pharmaceutical markets, besides Europe, for growth. He added that the merger of Pfizer’s generic drug arm Upjohn with Biocon’s partner Mylan will boost Biocon Biologics’ footprint in China.
Apart from recombinant human insulin, trastuzumab and pegfilgrastim, Biocon Biologics has also commercialized biosimilars for bevacizumab and the anti-cancer medicine insulin glargine in several markets.