Late in 2017, Biocon housed its biologics assets in a new subsidiary, Biocon Biologics. Since then, the biologics business has grown quickly, increasing its sales by 63% over the first half of its fiscal 2020.
Now, Biocon Biologics has secured investment to support the next phase of its evolution. True North, an Indian private equity fund, is investing Rs 536.25 Crore ($75m) in Biocon Biologics.
Kiran Mazumdar-Shaw, Biocon’s managing director, said the True North investment comes at an “inflection point” for the biologics subsidiary, pointing to the need to add manufacturing capacity and commercial infrastructure to support its first wave of biosimilars. Those investment requirements persuaded Biocon now is the right time to start bringing external investors on board.
Mazumdar-Shaw said, “We have thus started the value unlocking process with the aim of investing, competing and winning in the large and growing opportunity for biosimilars.”
True North’s long-running relationship with Biocon makes its status as an early external investor in the biologics subsidiary unsurprising. The Indian private equity fund invested in both Biocon and its contract research arm, Syngene, before they went public in 2004 and 2015, respectively.
Biocon Biologics may be on a similar path to Syngene. The Economic Times reports the True North investment marks the start of a larger fundraising round that could ultimately generate $300m for the biologics business. As happened with Syngene, an initial public offering could be another source of investment for Biocon Biologics further down the line.
Investor interest in Biocon Biologics rests on its potential to capture a sizable slice of some nascent, potentially sizable markets. The subsidiary is involved with biosimilar versions of blockbuster drugs, including Herceptin (trastuzumab) and Humira (adalimumab), and it has plans to expand access to recombinant human insulin by making it available to low and middle-income countries for less than $0.10 a day.
Biocon Biologics thinks these products could have a big impact on patients and its financial prospects. The current plan is to provide access to five million patients and grow annual revenues to $1bn by fiscal 2022.
True North is the first external investor to position itself to profit if Biocon Biologics delivers on that strategy. Temasek and CDC, which are respectively owned by the governments of Singapore and the UK, are reportedly among the other organizations considering investing in Biocon Biologics.