Biocon-Serum deal: Serum to double investment in Biocon's unit to $300 million

India's Biocon Ltd Chairman and Managing Director Kiran Mazumdar-Shaw

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Serum Institute of Life Sciences would make an additional equity investment of $150 million in Biocon Biologics Limited. The two firms have agreed to restructure equity investment as part of their strategic alliance. With this, Serum's total aggregate equity investment in Biocon Biologics amounts to $300 million.

A regulatory filing by Biocon to the stock exchanges said, ''Biocon Biologics Limited and Serum Institute of Life Sciences have reached an agreement to withdraw from the original equity structure contemplated under their strategic alliance announced in September 2021.''

Also Read: Biocon, Mylan biosimilar deal in last leg; Serum Institute to buy additional stake of $500 million in Biocon Biologics: Sources

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

This investment is in addition to the $150 million that Serum Institute of Life Sciences had invested in Biocon Biologics in November 2022, resulting in Serum Institute of Life Sciences’ aggregate equity investment in Biocon Biologics amounting to $300 million.

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.

Speaking to CNBC-TV18 on the revised agreement with Serum, Kiran Mazumdar-Shaw-Executive Chairperson and founder of Biocon Limited Kiran Mazumdar-Shaw said, “Investment in Biocon Biologics is now being done at a $6 billion valuation. The deal will include the complete portfolio of Serum’s vaccines.”

CEO and owner of Serum Institute, in an exclusive conversation with CNBC-TV18 said that Serum will have a 4.9% stake in Biocon Biologics. "$300 million is one of the largest investments made in a strategic alliance by us," he said. He also added that the alliance with Biocon Biologics is not limited to Covid vaccines while adding that Serum wouldn't look at increasing our stake as of now. “Will watch other investors' interest in the business,” he added.