Biocon’s biosimilar biz tops $4 bn in valuation

Biopharmaceuticals company Biocon has reported that its biosimilar business has topped $4 billion in valuation, as marquee investors continue to be bullish on the company providing high-quality, affordable drugs to patients across the world. Moreover, the demand for biosimilars is set to grow as more number of patents of originator biologics reach their expiry. A biosimilar is a biopharmaceutical drug designed to have active properties similar to those of a drug that has previously been licensed.

On Friday, Biocon Biologics Ltd, the biosimilar business subsidiary of the Biocon, announced that Abu Dhabi-based sovereign wealth fund ADQ picked up 1.80% stake in the company for $75 million (₹555 crore). “The current investment has put (the) post money valuation of Biocon Biologics at $4.17 billion,” says Kiran Mazumdar-Shaw, executive chairperson, Biocon.

In January last year, private equity firm True North picked up a 2.44% stake in Biocon Biologics for $75 million, valuing the company at $3 billion on a pre-money equity basis. Since then, the company further went on to raise private capital from Tata Capital Growth Fund ($30 million) and Goldman Sachs ($150 million).

Shares of India-listed Biocon ended the day at ₹466 a piece on the BSE Sensex, up 2.43% over the previous day’s close, giving the company a market valuation of about $7.6 billion. Post the ADQ transaction, which is subject to customary condition precedents and approvals, Biocon will hold an 89.89% stake in Biocon Biologics on a fully diluted basis.

“Biocon Biologic’s proven R&D track record and partnerships worldwide provide us with an opportunity to benefit from the biosimilar sector that is set to grow as patents of originator biologics expire and patients demand lower priced drugs globally,” says Mohamed Hassan Alsuwaidi, CEO, ADQ.

The company has one of the largest biosimilars portfolio globally, spanning recombinant human Insulin (rh-Insulin), insulin analogs, monoclonal antibodies and therapeutic proteins for oncology, immunology, and other chronic disease areas. It has the full spectrum of insulins (regular, basal, and rapid) in its pipeline. According to Biocon’s annual report, its biosimilars business constituted about 29% of its total revenues in FY20.

“This investment [by ADQ] is an endorsement of the value that Biocon Biologics business has built as a fully integrated pure-play biosimilars company and will enable us to expand our capabilities further,” adds Mazumdar-Shaw, who has featured on Fortune India’s Most Powerful Women in Business list since its inception in 2011. In last year’s list, she was at Rank 3.

“Our relentless desire to make a real difference pushes us to redefine innovation and build a disruptive business model that lowers treatment costs and improves healthcare outcomes, whilst delivering on shareholder value and our business objectives,” says Dr Christiane Hamacher, CEO & Managing Director, Biocon Biologics.