The Serum Institute of India (SII) is an Indian biotechnology and biopharmaceutical company based in Pune. It was founded by Cyrus Poonawala in 1966 and is a part of the Cyrus Poonawalla Group. Serum has decided to invest in Biocon's Biocon Biologics (BBL) to the tune of $300 million, which is said to be double the previous investment. Before this, the Serum Institute of Life Sciences (SILS) had invested $150 million. Being the world's largest manufacturer of vaccines, the additional investment would bring the total valuation to $6 billion, whereas the initial investment valuation was $4.9 billion. BBL is Biocon's biosimilar subsidiary, which was founded by Kiran Mazumdar Shaw.
The investment made by Serum includes the complete portfolio of COVID-19 vaccines and also other non-CoVID vaccines under development," said Kiran Mazumdar Shaw. For Serum Institute, they respect and admire the business that BBL has created and will hold close to a 5 per cent stake in BBL," said Adar Poonawalla, CEO of Serum Institute of India. The current investment is said to be the largest investment made by Serum so far for any strategic alliance. Poonawalla made clear that the current investment is not about having a board seat; at the moment, he will be executing his right after meeting his preoccupations. Serum Institute is looking for a long-term horizon of 15 years with BBL. They had also agreed on profit sharing based on the vaccination.
The additional investment would help to avoid inequitable access to vaccines and combine the strengths and resources of both companies to build a strong relationship. The partnership will open the door for Biocon to access Serum Institute Life Sciences' current development ideas to address the issues of other communicable diseases. Biocon Biologics will also establish a vaccine R&D division to support the strategic alliance in developing both vaccines and biologics for communicable diseases at its own cost. Vaccines provide a good strategic fit for Biocon's business and would open up a dimension for improving global health care. The new arrangement will provide BBL with access to 100 million doses annually, along with distribution rights. The two companies will enter into service level agreements (SLAs) for manufacturing and distributing the vaccines and antibodies. This alliance would enable them to derive revenue and earnings before interest, tax, depreciation, and amortization (Ebitda) in a year's time. This collaboration is likely to provide good growth opportunities for Indian pharma entrepreneurs.
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