Syngene International Ltd, a drug research company backed by Singapore sovereign wealth fund GIC, is set to acquire Stelis Biopharma’s manufacturing unit in Bengaluru for Rs 702 crore (around $88 million) in cash.
Syngene has signed a pact with the biopharmaceutical company to snap up its Unit 3, a biologics manufacturing unit, it said in a statement on Wednesday.
"This acquisition strengthens our growing position as a leading biologics contract development and manufacturing service provider and adds drug substance capacity and a drug product capability years earlier than our internal capex program," said Jonathan Hunt, Syngene chief executive and managing director.
The transaction comes about five months after GIC invested Rs 1,075.2 crore (around $131 million) in Syngene via a block deal.
The transaction has received approval from the boards of both companies and is anticipated to be completed within 90 days, contingent upon meeting customary conditions. This includes obtaining the necessary approvals from lenders and regulatory authorities, the statement added.
Syngene said it will invest up to Rs 100 crore in repurposing and revalidating the facility. After the transaction is completed, the site will contribute an additional 20,000 litres of biologics drug substance manufacturing capacity to Syngene. Additionally, the site has the potential for future expansion, with the ability to accommodate an extra 20,000 litres of biologics drug substance manufacturing capacity.
Syngene anticipates that the facility will become operational in 2024, following a comprehensive program of facility upgrades and re-validation.
Syngene revenue from operations for the fiscal year ended March 31, 2023 increased 23% to Rs 3,193 crore from Rs 2,604 crore the year before. Its profit after tax, excluding exceptional items, grew 10% to Rs 464 crore.