Serum Institute of Life Sciences has increased its stake in Biocon Biologics Limited with an additional equity investment of $150 million. Going forward, Serum's total aggregate equity investment in Biocon Biologics amounts to $300 million.
"$300 million is one of the largest investments made in a strategic alliance by us. We respect and admire the Biologics business built by Biocon," Serum Institute of India Chief Executive Officer Adar Poonawalla said while speaking to CNBC-TV18.
The Serum Institute boss said he was optimistic about this business. "This would be a strategic partnership with Biocon Biologics. There may be future investment from other investors in Biocon Biologics but will not comment on increasing stake in Biocon Biologics," he said.
Serum now has a 4.9 percent stake in Biocon Biologics. The two companies — Serum Institute of Life Sciences and Biocon Biologics — have agreed to restructure equity investment as part of their strategic alliance.
'Adult vaccine market to grow up to 3 times in next 5 yrs'
Poonawalla also expects the adult vaccine market to grow two to three times in the next five years. "Alliance with Biocon Biologics is not limited to Covid-19 vaccines. Will look at the manufacturing of vaccines beyond Covid-19 with Biocon Biologics," he said.
"Will watch other investors' interest in the business," he further said, adding that he is yet to decide which vaccines will be produced first.
Poonawalla said the company has struck a profit-sharing agreement with Biocon Biologics, depending on the vaccination made. Poonawalla expects that the company would see revenue and EBITDA coming out of this deal in a year’s time.
Poonawalla said the company has a 15-year horizon on the vaccine deal with Biocon Biologics.
As per the new arrangement, Biocon Biologics will have access to 100 million doses of vaccines annually together with the distribution rights to Serum’s vaccine portfolio, which will add to Biocon Biologics’ product portfolio for global markets.
“The new terms will serve the objectives of both the companies, as it provides Serum Institute of Life Sciences an aggregated equity investment in Biocon Biologics amounting to $300 million and provides Biocon Biologics additional product offerings for global markets,” Biocon said.