skip to main content
Close Icon We use cookies to improve your website experience.  To learn about our use of cookies and how you can manage your cookie settings, please see our Cookie Policy.  By continuing to use the website, you consent to our use of cookies.
Global Search Configuration

Private equity group True North continues to back the Biocon group and is picking up a minority stake in Biocon Biologics in a deal that values the subsidiary at $3bn. Separately, another subsidiary, Biocon Biosphere, has also been set up as part of efforts to unlock the full potential of the business.




Biocon Ltd. has kicked off 2020 on a high, drawing private equity interest in its subsidiary Biocon Biologics India Ltd.

Home-grown PE firm True North, which has had a long successful association with the Biocon group, is investing about INR5.36bn ($74.5m) for a 2.44% stake in the biosimilars business. The minority holding takes into account “all restructuring”, including the filed merger of Biocon Research Ltd. with Biocon Biologics, valuing the biologics arm at $3bn on a pre-money equity basis.

Biocon retains 96.07% in Biocon Biologics for now, though there are expectations of further dilution as the Bengaluru-based firm seeks to unlock value from the biologics business. Biocon has in the past indicated that it could consider a potential initial public offering and listing - much like it did with its research services arm Syngene International Ltd.. (Also see "Biocon Biologics Reaches Landmark Sales Figure As IPO Beckons " - Generics Bulletin, 2 May, 2019.)

True North was an investor in both Biocon and Syngene prior to their listing.

True North, which counts healthcare and life sciences as a focus sector, has invested $600m across 10 companies so far. The PE firm had earlier partnered with Glenmark Pharmaceuticals Ltd. for the Mumbai-based firm’s orthopedic and pain management business in India and Nepal. (Also see "Glenmark spins off global API business" - Generics Bulletin, 31 Aug, 2018.)

Deal Valuation
Experts tracking the True North-Biocon Biologics transaction noted that valuations of such deals would typically be on the “higher side” considering the complexity of the manufacturing and the inherent intellectual property.

“While separate guidance for the subsidiary may not be available, purely on an annualized basis, the business appears to be valued around 33-34 (x) EV/EBITDA  fiscal year 2020,” Navroz Mahudawala, managing director of the investment banking and consulting services firm Candle Partners, told Generics Bulletin sister publication Scrip.

But he added that while valuation may be on the higher side, considering the growth and a probable first mover advantage, “it appears fair”. “Deals like this validate the Indian pharma IP [intellectual property] story and we may see similar deals going forward,” Mahudawala predicted.

Some analysts also see the deal as more of a move towards providing an “anchor valuation” to Biocon Biologics before it is carved out as a separate listed entity.

Biocon had earlier transferred the company’s insulin formulations, biosimilars API (active pharmaceutical ingredient) and biosimilars formulation business, as well as the insulin API business, to its step-down subsidiary, Biocon Biologics India Ltd.

Important Inflection Point
Biocon's top brass emphasized that True North’s investment was an endorsement of the value that Biocon Biologics has demonstrated as a global biosimilars player, having commercialized three of its molecules in developed markets like the EU, US, Japan and Australia.

“This is at an important inflection point as we gain commercial success with our first wave of biosimilar products and invest in the long term through broadening our pipeline, expanding our manufacturing capacity and increasing our commercial footprint,” chair and managing director Kiran Mazumdar-Shaw noted.

Biocon, which has emerged as the prominent face of the Indian challenge in the biosimilars arena, last month launched Ogivri (trastuzumab-dkst), the second biosimilar from its partnered portfolio to be commercialized by Mylan NV in the US. (Also see "US Trastuzumab Competition Heats Up" - Generics Bulletin, 2 Dec, 2019.) Ogivri was also launched in Australia last year.  

Another partnered product, Fulphila, the first biosimilar pegfilgrastim to be approved in the US, was launched in July 2018 and Biocon sees it as one of the “most successful” biosimilar launches there. Biocon-Mylan’s Semglee and Ogivri also became the first biosimilar insulin glargine and biosimilar trastuzumab, respectively, to be made available in Australia through the Pharmaceutical Benefits Scheme.

In September, last year Biocon also committed to facilitate universal access to recombinant human insulin by providing the therapy at under $0.10/day in low and middle-income countries. These nations account for the bulk of the global diabetes burden.

Confident Of Reaching Revenue Target
The string of launches and overall business momentum has also seen Biocon Biologics set itself ambitious targets, though the unit’s CEO and ex-Roche executive Christiane Hamacher has in the past maintained that the $1bn revenue goal “is by no means a loose target.” (Also see "Biocon Biologics Eyes Sales Of $1bn" - Generics Bulletin, 29 Oct, 2019.)

Hamacher said that the investment by True North validates Biocon Biologics’ science, scale, scope and strategy. “Through prudent investments in R&D, high quality manufacturing infrastructure as well as commercial and market access infrastructure, we are confident of achieving our aspirational goal of serving five million patients through our biosimilars portfolio and reaching our aspirational revenue target of $1bn in fiscal year 2022.”

Biocon Biologics’ current  pipeline of 28 molecules includes 11 partnered with Mylan, several others with Sandoz International GMBH and also some that the Indian firm is developing independently.

New Biocon Biosphere Subsidiary
Separately, Biocon has also created a wholly-owned subsidiary, Biocon Biosphere, to drive new investments in the API and generic formulations businesses.

Siddharth Mittal, CEO and joint managing director of Biocon, said the subsidiary will focus on small molecule manufacturing facilities. “Currently the immunosuppressants drug substance facility is being planned in Visakhapatnam under this subsidiary,” Mittal told Scrip.

The paid-up capital of Biocon Biosphere is currently INR500,000 but could be increased to up to INR500m to fund future capital expenditure.

However, none of the existing assets under parent company Biocon Ltd. are proposed to be transferred to the new entity, he clarified. Biocon's current API portfolio largely comprises fermentation-derived molecules such as statins, orlistat, immunosuppressants and other specialty molecules. It has been aiming to develop capabilities in niche therapy areas as well.

Biocon divides its business into four verticals - biologics (biosimilars and novel drugs), branded formulations, small molecules (APIs and generic formulations) and research services. In the past, spinning out businesses has signaled a desire to achieve independent focus and funding for future growth plans.

This story first appeared in our sister publication, Scrip.

Read also


Next steps

Whether you’re a small biotech start-up, research firm, generic manufacturer or a global pharmaceutical giant, you need focused, independent insight and opinion on market developments.

Our team is ready to hear from you for a particular request or area of interest. Please do not hesitate to reach out and discuss.

Contact us for product technical and account support.

  • US Toll-Free   : +1 888 670 8900 
  • US Toll             : +1 212-600-3520
  • UK & Europe : +44 (0) 208 052 0700

Have an immediate and specific information need?

Browse and buy from 1000s of analysis and research reports now: