True North to invest Rs 536.25 crore in Biocon Biologics for 2.44% stake

Shares of Biocon Ltd were trading at Rs 287.40 per scrip on the BSE, down 4.53 per cent from its previous close.

Biotechnology major Biocon on Monday said private equity firm True North will invest Rs 536.25 crore to acquire 2.44 per cent stake in its arm Biocon Biologics, valuing the subsidiary at Rs 21,450 crore on a pre-money equity basis.

The board of Biocon Biologics India Ltd has approved a primary equity investment by True North. As per the terms of the proposed agreement, True North will invest Rs 536.25 crore and will eventually translate to a 2.44 per cent minority stake in the biosimilars business after all restructuring, including the filed merger of Biocon Research Ltd with Biocon Biologics, Biocon said in a filing to the BSE.

This values Biocon Biologics at Rs 21,450 crore or around USD 3 billion, on a pre-money equity basis, it added.

“This investment is an endorsement of the value that Biocon Biologics has demonstrated as a global biosimilars player, having commercialised three of its molecules in developed markets such as the EU, the US, Japan and Australia,” Biocon Chairperson and MD Kiran Mazumdar-Shaw said.

This is at an important inflection point as, “we gain commercial success with our first wave of Biosimilar products and invest in the long term through broadening our pipeline, expanding our manufacturing capacity and increasing our commercial footprint,” she added.

In similar vein, Biocon Biologics CEO Christiane Hamacher said the investment by True North in Biocon Biologics reflects a high level of conviction in Biocon Biologics’ status as a global frontrunner in biosimilars that is leveraging its large-scale manufacturing capabilities to shift the access paradigm for these life-saving therapies.

“True North has had a long successful association with Kiran Mazumdar-Shaw and the entire Biocon team and see them as pioneers and leaders in specialised niches,” True North partner Satish Chander said.

True North is happy to associate with them for the third time through this investment in Biocon Biologics. Biosimilars is a fast-growing industry that addresses a fundamental need of bringing affordability to specialised effective biologic products, he added.

Biocon Biologics has a product pipeline of 28 molecules, including 11 with Mylan, several with Sandoz, and is developing many independently.

Shares of Biocon Ltd were trading at Rs 287.40 per scrip on the BSE, down 4.53 per cent from its previous close.