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True North buys into Biocon Biologics, deal values firm at around $3.5 billion

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Mumbai: Leading homegrown private equity fund True North has acquired about 3 per cent of Biocon Biologics India Ltd (BBIL), a wholly owned subsidiary of Biocon, for $100 million, valuing the unlisted arm at $3-3.5 billion (Rs 25,000 crore), said two people aware of the development.

This is the first step of a larger $200-300 million fundraising round that’s expected to close before mid-2020. An announcement is expected this week.

This is the first stake dilution in Biocon Biologics since it was formed two years ago.

ET was the first to report this plan on August 21. Biocon is also in talks with other global investors such as the Singapore government-owned Temasek Holdings and the UK government’s investment arm CDC for subsequent rounds in which True North may also participate, said one of the persons cited above. The parent has plans to list Biocon Biologics in the next few years in similar fashion to its contract research arm Syngene, which got listed in 2015 and had a market value of Rs 13,140 crore at the close on January 3.

Biocon has a Rs 36,126 crore market cap with a 61 per cent promoter holding. A True North spokesperson declined to comment.

Biocon, Temasek and CDC Group didn’t respond to queries. Biopharmaceutical firm Biocon set up Biocon Biologics in December 2017 to house all its biologics business — biosimilars that include monoclonal antibodies, recombinant insulins and novel biologics — keeping future value unlocking in mind.. A biosimilar is copy of a biological compound, such as an antibody made by a living organism, unlike a generic drug, a chemically synthesised molecule.

Compared with generic drugs, manufacturing of biosimilars, especially monoclonal antibodies, is expensive and complex. It’s the third time that True North, formerly India Value Fund Advisors or IVFA, will be investing in the Kiran Mazumdar Shawhelmed biopharmaceutical business.

In 2014, IVFA had picked up about 10 per cent of Syngene before the company went public in 2015.

IVFA had also invested in Biocon in 2003 in a pre-IPO round and exited in 2004 soon after it went public. Biologics has been the fastestgrowing division within Biocon, with revenue almost doubling in FY19 to Rs 1,517 crore from Rs 770 crore in FY18.

The company is targeting revenue of $1 billion in FY22. In 2018, Biocon and its partner Mylan received approval for Pegfilgrastim, their first biosimilar for cancer treatment from the US drug regulator.

Biocon-Mylan’s Fulphila is the first biosimilar of pegfilgrastim available in the US market.

It’s Biocon’s second biosimilar to get US Food and Drug Administration approval after Trastuzumab in 2017.

In November, the USFDA had approved Biocon’s new facility in Bengaluru to make fulphila. “Biocon Biologics is focusing on innovative business models to reduce the cost of human insulin and cancer drugs as it looks to build a pipeline of 28 biosimilars across global markets,” Biocon Biologics chief executive Christiane Hamacher told ET last month.

Biocon hired international pharma specialist Hamachar, former executive at Roche and Schering AG, in March. True North has wide exposure in the healthcare and pharmaceutical sector in India through investments in KIMS Hospitals, Trivitron, Cloudnine Hospitals and DM Healthcare.

In 2018, it acquired the orthopaedic and pain management business of Glenmark Pharmaceuticals for $100 million. True North, which manages about $3 billion in six funds, has a portfolio of companies such as Fedbank Finacial Services, Magma Fincorp, Homefirst Finance, Infinity Fincorp and Hicare.




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