Goldman Sachs Investment in Biocon Biologics

By Angel Broking | Published on 10th November 2020 | 142

Goldman Sachs Investment in Biocon Biologics

Biocon Chairperson and MD, Kiran Majumdar Shaw confirmed that she has IPO on her plate. And yes, she confirmed that Biocon is getting a USD 150 million investment from Goldman Sachs. Shaw confirmed that the pre-IPO investment is crucial for Biocon to reach the target of USD 1 billion in the next two years.

Goldman Sachs To Invest In Biocon Biologics

Biocon Ltd. on November 7 announced that its board had approved Goldman Sachs investment of USD150 million to its subsidiary Biocon Biologics Ltd. As per the terms of the contract, Goldman Sachs is offered optionally convertible debentures of post-money equity valuation of USD 3.94 billion.   

Commenting on the news, Shaw said it is a part of their strategic plan. The capital injection is scheduled at the time when Biocon is preparing to become a global leader, is a real boost to the company’s image. Biocon Biologics also declared its plans to make an IPO debut. 

A Little Background Of Biocon Biologics 

Biocon Biologics is a leading name in producing biosimilar drugs. The company has one of the largest portfolios globally that extent patients’ access to advanced therapies. It manufactures a plethora of Rh-Insulin, insulin analogs, monoclonal antibodies, therapeutic proteins for oncology, immunology, and other chronic disease drugs. 

The company has an entire spectrum of insulin in its pipeline. Recently, Biocon has commercialised Insulin Glargine, making it the only company from India to provide affordable access to three products: biosimilar monoclonal antibody (Trastuzumab), a therapeutic protein (Pegfilgrastim) and an Insulin analog (Glargine) to US patients.  

Biocon Biologics is India’s largest biopharmaceutical company. The company started its journey in 1978 played a key role in transforming India’s image as a pioneer and leader in manufacturing a wide range of affordable biopharmaceutical drugs. Biocon produces drugs toward prevention, alleviation, and treatment of chronic diseases, increasing assess to cutting-edge biosimilar medicine to over million patients.   

Investment from Goldman Sachs will enable Biocon to elevate R&D and high-quality manufacturing as well as its footprint in the global market.

Highlights of the deal

  • Global investor, Goldman Sachs to invest in Biocon Biologics, a subsidiary of Biocon Ltd. for Rs 1,125 crores  
  • It is a pre-IPO investment received by Biocon Biologics. Goldman Sachs is offered optionally converticle debentures worth USD 3.94 billion 
  • The investment will fuel Biocon’s research and development and manufacturing process 
  • Biocon targets to become USD 1 billion company in terms of revenue earning by 2022
  • After the investment news hit the market, Biocon shares gained marginally to finish at Rs 414.75 on BSE on Friday, a gain of 0.38 percent

Conclusion

Talking about the deal, MD, Kiran Majumdar Shaw said the IPO offering would be much bigger in size. The pre-IPO investment will help set a benchmark in the market about the company’s worth. She added that having big marquee investors like Goldman Sachs, Tata Capital, and True North assisted Biocon in explaining its journey in value creation in a better way, will play a pivotal role during IPO launch.     

The biosimilar drugs sector is poised to see robust growth in near future, assisted by a collaborative regulatory pathway, budget sustainability in the healthcare sector, and improved patients’ access to treatment. In this case, Biocon Biologics is excellently placed to drive the growth.