Serum Institute exploring fund raise at subsidiary level by diluting minority stake for COVID-19 project: Adar Poonawalla

5 | India to get 100 million AstraZeneca's vaccine shots by December 2020, say Reports: With Covishield, the coronavirus vaccine candidate jointly developed by the University of Oxford and British firm AstraZeneca entering phase 3 trials, Serum Institute of India (SII) has started ramping up the production of the vaccine. The world's largest vaccine maker plans to have 100 million doses ready by December 2020 for an inoculation drive that could begin across India that same month, Bloomberg reported on November 13.

Serum Institute of India is looking to induct investors at the subsidiary level and dilute a minority stake, as the Pune-headquartered firm looks to hedge its bets and raise funds for its critical COVID-19 project. The fund raising plans are at an early stage and were confirmed by Serum Institute CEO Adar Poonawalla in an interview to CNBC-TV18.

The world’s largest vaccine manufacturer has tied up with British drug maker AstraZeneca for manufacturing the Oxford vaccine candidate for novel coronavirus, which is considered a frontrunner in the ongoing fight by scientists and researchers against the global pandemic.

On June 26, Moneycontrol was the first to report that the privately held vaccine manufacturer had appointed investment banks and was looking to reduce the enormous development risks attached to the project and raise around a billion dollars by selling a minority stake to investors with suitable capabilities.

“It’s not happening at the Serum Institute level. It will happen, if we get the right offers and valuations, in a subsidiary, which has five COVID-19 vaccine candidates and other vaccines, including a one billion dose facility as an asset. It’s still very early, I think the bankers are talking to funds right now. If that clicks in a month or two, we may dilute 15-20 percent equity in that and raise capital there. We won’t be raising capital at the Serum Institute level as that has other implications for all other vaccines and commitments (and) that’s a much larger picture and a much larger entity,” Poonawalla told CNBC-TV18.

In the interaction, he alluded to the soaring valuations of American biotech and vaccine firms Moderna and Novovax, which are also working on COVID-19 vaccine candidates. Both firms have seen a sharp surge in their share prices in recent weeks.

“Right now, the valuations that we see for COVID-vaccine manufacturing candidates, like Novovax and Moderna, is just crazy at the moment. We are looking at hedging our bets to be able to manage all the capital and operating expenditure risk that we are seeing. We are bringing on board some investors that understand these risks and are committed to the cause of making a difference to humanity,” he added.

Serum Institute is planning to mass-produce billions of doses of COVID-19 experimental vaccines on the back of tie-ups with various global firms. One of these arrangements includes a critical licence to mass produce an experimental COVID-19 vaccine by the University of Oxford and AstraZeneca. Initial studies by researchers of the Oxford University COVID-19 vaccine candidate show the vaccine is safe and induces an immune reaction.

Back home, Serum Institute will soon apply to the Indian regulator to begin domestic trials for the vaccine in India. After approval, the firm will kick start trials and will start manufacturing the vaccine in large volumes. It will await final approvals prior to its market launch.