Biocon Ltd said late on Thursday its biologics unit will sell a 15% stake to a Serum Institute of India (SII) subsidiary for access to 100 million doses of vaccines annually for 15 years, including Covid-19 shots.
SII, which makes AstraZeneca's Covid-19 shot, branded as Covishield in India, is the world's largest vaccine maker.
The deal with Serum Institute Life Sciences values Biocon Biologics at about $4.9 billion and will solely focus on Covid-19 vaccines in the initial years, the companies said.
The 15% stake in the Biocon unit is valued at more than $730 million, Biocon's Executive Chairperson Kiran Mazumdar-Shaw said.
The unit, which makes pharmaceutical ingredients, will gain a foothold in the vaccine manufacturing space following the deal.
As part of the deal, the Biocon unit and the SII subsidiary will make and distribute vaccines and antibody treatments.
Biocon Biologics will also invest in setting up a research division for vaccines, with SII Chief Executive Officer Adar Poonawalla getting a seat on the board of the Biocon unit.
SII also expects to ramp up its Covishield manufacturing capacity to 200 million doses per month, Poonawalla said at a media briefing on Friday.
While there is a current ban on Covid-19 vaccine exports in India, Poonawalla said SII was trying to strengthen its supply chain and source raw materials from within the country as well.
SII is also manufacturing and stockpiling Novavax Inc's Covid-19 vaccine, which is yet to be granted approval by the Indian health authorities.
In January, Abu Dhabi-based investment firm ADQ invested $75.47 million in Biocon Biologics for a 1.8% stake.
Biocon Ltd's shares rose as much as 4.6% early on Friday but gave up gains to trade 0.67% lower amid losses in the broader market.
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