Serum Institute plans to raise $1 billion for COVID-19 vaccine development: Report

The world's largest vaccine manufacturer by volume, Serum Institute of India (SII), is looking to raise up to $1 billion (around Rs 7,500 crore) for Covid-19 vaccine development.

For this, the company is in discussions with private equity firms, including Blackstone and KKR, as well as philanthropists and social venture funds, says a report by The Economic Times.

Moneycontrol had first reported this on June 26:

Exclusive: Poonawalla family's Serum Institute looks to raise $1 billion for big-ticket COVID-19 vaccine project

SII has partnered with AstraZeneca for manufacturing the potential COVID-19 vaccine developed by the University of Oxford.

The Pune-based vaccine maker, privately owned by Cyrus Poonawalla and his son Adar Poonawalla, plans to float a special purpose vehicle (SPV) for its vaccine candidates, said the report.

“We are in talks with a few investors but there is no comment beyond that,” a Serum Institute spokesperson told the publication.

In an interview to CNBC-TV18 in July, Serum Institute CEO Adar Poonawalla confirmed that the fundraising plans are at an early stage where the Serum Institute is looking to induct investors at the subsidiary level and dilute a minority stake. The Pune-headquartered firm looks to hedge its bets and raise funds for its critical COVID-19 project.

The fundraising exercise will be managed by Goldman Sachs, Citi and Avendus, said the report.

SII, which plans to make 100 million doses of vaccine every month and 400 million doses of the Oxford vaccine by the end of 2020, recently received $150 million from Bill & Melinda Gates Foundation for the vaccine development and distribution.

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Earlier, SII CEO Adar Poonawalla told the publication in an interview in July that the company has infused nearly $200 million for the AstraZeneca-Oxford vaccine at “personal risk”, adding that it hadn’t received any funding or reached advance purchase pacts with the Indian government.

He further mentioned that the aim was to concentrate on getting the mandatory approvals to carry out trials and start manufacturing the vaccine.

It has now received permission for conducting Phases 2 and 3 human clinical trials of the vaccine candidate in India. It will reportedly start Phase 2 human clinical trials of the candidate this week.

In 2015, SII was in negotiations to sell an up to 10 percent stake in the parent firm, seeking a valuation of up to $12 billion. However, the talks were called off, as per the report.

The reason behind the decision was attributed to market volatility by the company, but as per the reports investors were reluctant about the premium valuation sought and lack of liquidity options such as an IPO.

However, the coronavirus pandemic and the race to develop COVID-19 vaccine have changed industry dynamics. SII has signed exclusive agreements with AstraZeneca and Novavax, the report stated.

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