Moneycontrol PRO

Strides re-enters injectable biz, to take controlling stake in Stelis Biopharma

The Strides board on September 20 approved an additional investment up to $40 million in Stelis, over a period of 24 months for the purpose.

September 20, 2019 / 09:05 PM IST
  • bselive
  • nselive
Todays L/H

Strides Pharma Science, which had sold its injectable unit Agila Specialties to Mylan  in 2013, is all set to re-enter injectables business again.

Interestingly, Strides is doing so by reclaiming control of Stelis Biopharma, just fives years after it sold stake to GMS Holdings, a Jordanian investment group.

The Strides board on September 20 approved an additional investment up to $40 million in Stelis, over a period of 24 months for the purpose.

The re-entry comes after Strides sold its injectable unit, Agila Specialties, to US-based Mylan, one of the world's top generic drug makers, in a deal valued at $1.6 billion in December 2013.

Strides is known for churning its business. The company is now focusing on building a formulation business targeting regulated markets like US and Europe. Injectable drugs are considered to be high margin drugs, compared to oral solid dosages (OSDs), given the stringent regulatory and manufacturing challenges.

The timeline

Strides entered the biotech business with an acquisition of around 70 percent stake in Inbiopro Solutions Private Limited in 2012. The business was later rebranded as Stelis Biopharma to pursue opportunities in biosimilars.

In September 2014, GMS Holdings, a Jordanian investment group, agreed to invest $ 21.90 million for a 25.1 percent stake in Stelis.

GMS later increased is stake to 29.84 percent and Strides promoter Arun Kumar's  company Tenshi Life Sciences has 30.73 percent, as  on November 2018. The rest is held by Strides.

The re-entry

"The proposed new investments will be a primary infusion into Stelis which will enable Stelis to achieve its objective of becoming a compelling global player in the biopharmaceutical space and also accelerate Strides' re-entry into sterile injectables business post the completion of the Company’s non-compete period in December 2019,” the company said in a statement.

Operational break-even

Stelis was set up to pursue biosimilars and offer high-end contract development and manufacturing services covering end-to-end biopharmaceutical value chain.

As on date, Stelis has invested over $160 million, of which $91 million is represented by equity capital infused by Strides and its equity partners.

Jordan-based investment firm GMS Holdings is other investor in Stelis.

Strides has invested $35 million for a 43 percent ownership in Stelis. With the aforementioned infusion up to $40 million by Strides and pending equity commitments from the other partners, Stelis would have attained a critical size to break even at the operational level which is expected in the next 18 months.

"Stelis is expected to have a positive EPS from FY22 and is well on its course to create significant value in the long-term for all its stakeholders," the company said.

Biosimilars & contract manufacturing

Stelis portfolio has two biosimilars. One is biosimilar version of Eli Lilly’s Forteo or teriparatide , which is used in treatment of Osteoporosis with market value of $2 billion.

The company said it had received Phase 3 waiver for EU, and is planning to file the drugin in first half of 2020. Stelis is also looking at significant licensing partnerships in discussion for the European markets, and plans to start phase-3 for the US market by end CY20.

The second drug is a biosimilar of an undisclosed pain relief injection, for osteoarthritis patients. The company said dossiers are under filing in emerging and rest of the world (ROW) markets with the potential to launch this product as a device.

Stelis is building an integrated insulin and insulin analogue platform with proprietary technology.

Stelis has completed the construction of its modern fully integrated state-of-the-art biopharma manufacturing facility at Bangalore. While the Drug substance block is under installation and validations, the drug product block has been validated and now ready for commercial operations. The company also started winning contracts.

Viswanath Pilla
Viswanath Pilla is a business journalist with 14 years of reporting experience. Based in Mumbai, Pilla covers pharma, healthcare and infrastructure sectors for Moneycontrol.
first published: Sep 20, 2019 07:36 pm