Biocon gains 2% after arm gets Rs 555 crore capital injection from ADQ

Shares of Biocon climbed 2 per cent to Rs 466 on the BSE on Friday after the company announced that the board of its subsidiary Biocon Biologics has approved a primary equity investment by Abu Dhabi based ADQ (“ADQ”), one of the region’s largest holding companies.

As per the terms of the proposed agreement, ADQ will invest Rs 555 crore for a 1.80 per cent minority stake in the biosimilar business, valuing Biocon Biologics at a post money valuation of around $4.17 billion, the company said in press release.

Post the completion of this transaction, Biocon will hold 89.89 per cent stake in Biocon Biologics on a fully diluted basis.

Biocon management said this investment is an endorsement of the value that Biocon Biologics business has built as a fully integrated pure-play biosimilars company and will enable the company to expand its capabilities further.

With this deal the company has now received a firm commitment of around $330 million towards building biosimilar assets. This bodes well for the company in the backdrop of significant capex requirements for upcoming biosimilars pipeline, ICICI Securities said in a note.

Biocon Biologics is engaged in developing high-quality, affordable biosimilars that expand patient access to a cutting-edge class of therapies across the world. The company has one of the largest biosimilars portfolios globally, spanning recombinant human Insulin (rh-Insulin), insulin analogs, monoclonal antibodies and therapeutic proteins for oncology, immunology and other chronic disease areas.