Matter experts hinted that Biocon Biologics, India’s leading biosimilar firm, is in talks to raise funds from ADQ, the Abu Dhabi government’s sovereign wealth fund as it is looking to strengthen its manufacturing muscle and add value to shareholders ahead of a proposed IPO.
These negotiations to raise fresh capital are coming two weeks after Biocon Biologics, a unit of Kiran Mazumdar Shaw-led Biocon, announced a $150-million infusion by Wall Street powerhouse Goldman Sachs. If the negotiations reach a powerful consensus, it would mark the company’s fourth successive investment in it this year.
The previous fund-raising round resulted in the firm raising a pre-money equity valuation of $3.94 billion and it is aiming for an initial public offering in two to three years.
“ADQ has held discussions to invest up to $100 million in Biocon Biologics and due diligence is being carried out on the proposed transaction. The deal is part of the overall strategic plan of value creation for the shareholders through Biocon Biologics, which is gearing up for a listing over the next two to three years,” matter experts stated.
“Biocon Biologics is looking to build value and invest in its R&D and manufacturing capabilities. ADQ was keen to invest in a high-quality pharma and healthcare firm in India with a strong pedigree and corporate governance standards,” they added.
A biosimilar is a biological product that exhibits similarities with another biologic medicine (commonly known as a reference product) that is already licensed. Although clinically speaking it has no significant difference in terms of safety and effectiveness from the reference product but requires regulatory approval.
“The Biocon arm has set a target of serving 5 million patients and clocking $1 billion in revenues in FY22. Sovereign wealth funds like ADQ are well connected and this deal can help Biocon Biologics get better access to the Middle East market. Investment bank Allegro Capital Advisors is advising Biocon Biologics on the fundraise,” he added.
A spokesperson for Biocon Biologics said, “We have recently announced about Goldman Sachs investment in Biocon Biologics and would inform about other investments as they mature. As a part of the process, we continue to engage with several global investors in line with the clarifications provided to the Stock exchanges in 2019. We would not like to comment on any specific wealth fund at this point in time.”