Biological E may raise 620 crore via stake sale

MUMBAI: Hyderabad-based vaccine-maker Biological E plans to raise about Rs 620 crore ($ 100 million) by selling up to 25% stake to financial or strategic investors, three persons with knowledge of the development said.

The drug-maker last week appointed E&Y as advisor for the stake sale, the persons said, adding Biological E plans to use the funds to launch new products, expand its research and development facilities and buy assets overseas.

“The promoters could sell up to 25% in the company,” one of the persons said, adding they were looking at a valuation of between $400-500 million. Biological E’s managing director Mahima Datla did not respond to emailed queries sent by ET seeking confirmation of the development.

For the year ended March 31, Biological E reported sales of Rs 400 crore. The six-decade-old company, which launched India’s first Japanese Encephalitis vaccine last year, supplies essential and life-saving drugs primarily to central and state government hospitals, public sector undertakings and the armed forces. It also exports drugs to 50 countries. “The company could also look at acquiring capabilities in other markets,” said an investment banker.

Analysts say global drugmakers are keen to acquire Indian companies as they face pressure of patent expiry on innovative molecules, a thin pipeline of new drugs, regulatory challenges and pricing issues.