Biotech major Biocon Ltd has announced that it has entered into an agreement to acquire 49% equity stake held by CIMAB SA, the exclusive representative of the Cuban biotechnology institute Center of Molecular Immunology (CIM), in Biocon Biopharmaceuticals Private Ltd (BBPL), a manufacturing facility held jointly by the two firms.
BBPL, which was engaged in manufacturing products based on the monoclonal antibodies, will become a wholly-owned subsidiary of Biocon after the completion of the deal.
Biocon CMD Kiran Mazumdar-Shaw told FE that the deal would bolster the company’s growing bio-similars manufacturing needs while bringing more financial viability to its Cuban partnership.
?The JV, BBPL was meant to serve as a manufacturing support to our Cuban partner programme, which we use for Biomab (oncology drug), and the Anti-CD6. But this requires a small portion of the capacity, which leaves a large part of the facility unutilised and becomes financially unviable. We need this capacity for our growing bio-similars business. The takeover will be a beneficial to both parties, since we will continue to support our Cuban partner, and additionally cater to our own growing needs,? he said.
According to Shaw, the BBPL was not expected to generate any profits for Biocon for the next three to five years.
“We are likely to see some losses in BBPL for the next three to five years and we expect it to take that much time to break even. These will be small losses, which we can claim through R&D tax benefits,” added Mazumdar-Shaw.
While she did not disclose the monetary size of the deal, Mazumdar-Shaw said that the consideration had been made through internal accruals.
Following the announcement, Biocon’s share price was up 2.67% on the BSE, closing at Rs 303.85 on Monday.