French pharmaceutical major Sanofi has received the Foreign Investment Promotion Board (FIPB) approval to invest R755 crore to buy out the remaining minority shareholders’ stake in Shantha Biotechnics. Sanofi holds 97% in Shantha Biotechnics as of December 31, 2012, with the remaining stake held by employees and other shareholders of the firm.
“Sanofi still does not have 100% stake in Shantha. However, since the initial acquisition, Sanofi Pasteur has been investing in Shantha on an ongoing basis. Currently, the FIPB approval is an ?enabling? approval in case it is decided in future to purchase the stake from other existing shareholders. This would increase Sanofi?s stake in Shantha,” a Shantha spokesperson told FE. With the present fund infusion, the company intends to use this capex for its proposed expansion plans. “The fresh investment will be used for completion of the Special Economic Zone (SEZ) manufacturing facility in Hyderabad, and for its operational requirements,” the spokesperson added.
Sanofi would continue to pursue development of Shantha Biotechnics, which it acquired for 550 million euros in July 2009, as a platform to produce affordable vaccines for global markets.
In 2009, Sanofi?s vaccine unit Sanofi Pasteur acquired a subsidiary of Merieux Alliance, a French bioindustrial group, ShanH, which owns the majority stake in Shantha Biotechnics.
The transaction valued the Indian company at 550 million euros or $783 million, or approximately R3,770 crore. This was claimed to be the first big budget deal in the Indian biotech sector.
In 2011, the company built a R500-crore vaccine manufacturing facility in Hyderabad, one of the largest in the country. Shantha manufactures vaccines for Hepatitis B, Diphtheria and Tetanus.
“Shan5 has been the core of our pediatrics combo profile and we have also settled on the path of looking at hexavalent (pentavalent with an addition of polio) in the future. It?s like a building block for future combination vaccines. The other vaccine that we are working on is Rotavirus – a completely different technology. This is a viral vaccine whereas Shan5 is bacterial. We are building our pipeline. Today, we are working upon vaccines for cholera, HPV, Typhoid conjugate and Hepatitis A, with support from Sanofi Pasteur experts in France,” Dr. Harish Iyer, CEO, Shantha Biotechnics told FE.
“The vaccine industry plays an important role in contributing to the nation?s foreign exchequer. Any one of these products will improve our revenues from exports. We maximised the assets from our portfolio as part of gearing up for the future. Every year, we have new registrations. Next year, we believe is the year of Shan5, and a couple of years after that will be Rotavirus and the year after that will be Shan6. And then we intend to have HPV, Hep A, etc,” he said.
“So over the next five to 10 years, we plan to have a series of product launches. The road map is quite clear and we are not just focusing on the urgent, but also the important. We hope through individual doses, we will get to more than a billion doses of antigens someday,” he added.
According to recent studies, the vaccines market has emerged as one of the most lucrative segments in the global pharmaceutical industry. With a projected CAGR of over 20%, the industry will emerge as the fastest growing therapy area registering revenues in excess of $40 billion by 2012, according to a few industry estimates on the global vaccine market. The US and Europe represent the two largest vaccine markets in the world and will continue experiencing healthy growth rate in future.
