Serum Institute to double its investment in Biocon unit to $300 million

Vaccine-maker Serum Institute of India’s subsidiary Serum Institute Life Sciences and biotechnological company Biocon Biologics, a subsidiary of Biocon, have restructured their equity investment. Serum Institute will now double its investment in the company from $150 million that was announced earlier in 2021 to $300 million. 

Biocon Biologics said that companies reached an agreement to withdraw from the original equity structure that was announced in September 2021. It said that Biocon Biologics had received National Company Law Tribunal (NCLT) Karnataka’s approval for the deal, but Serum was still awaiting the approval from NCLT Maharashtra to complete the merger. This would have provided Serum Institute Life Sciences an equity stake in Biocon Biologics. 

As per the new alliance, Serum will make an additional equity investment of $150 million, through conversion of the $150 million loan provided to Biocon Pharma, a wholly owned subsidiary of Biocon, into equity in Biocon Biologics. 

This additional investment of $150 million will result in Serum’s aggregate equity investment in Biocon Biologics amounting to $300 million. 

According to 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 that will add to Biocon Biologics’ product portfolio for the global markets. 

“The new terms will serve the objectives of both the companies, as it provides SILS an aggregated equity investment in BBL amounting to US$300 million and provides BBL additional product offerings for global markets,” Biocon said. 

As per the agreement between the two companies in 2021, Biocon Biologics was to offer approximately 15 per cent stake to Serum Institute Life Sciences, at a post-money valuation of ~$4.9 billion, for which it would have had access to 100 million doses of vaccines per annum for 15 years and commercialisation rights of the SILS vaccine portfolio, including COVID-19 vaccines, for global markets.

Also read: ‘Current Covid strain is mild, 5-6 mn Covovax doses already produced,’ says Serum Institute’s CEO Adar Poonawalla