Poonawalla’s Serum Institute may go public to raise Rs 500 crore

Jul 06, 2007
Noemie Bisserbe, Ashish Rukhaiyar & Gouri Athale
MUMBAI/PUNE

THE Dr Cyrus Poonawalla-owned Serum Institute of India (SII), the country’s largest exporter of vaccines and immuno-biologicals, and flagship of the Poonawalla Group of companies, may soon go public.

According to a source close to the development, the Pune-based company is expected to come up with a draft red herring prospectus by the beginning of next year. This could be one of the largest IPOs in the pharma sector, as the company is planning to raise around Rs 500 crore. According to a person close to the development, Enam Financial is advising the company on the issue.

Dr Cyrus Poonawalla, Serum Institute of India’s chairman and managing director, confirmed the development, but declined to give any time line for the issue. While it is still not clear how the company is planning to use the funds from the IPO, it could use it for financing the development of Serum Bio Pharma Park, India’s first biotech special economic zone (SEZ), recently set up in Pune.

While development work on the SEZ has already started and a few units have commenced production, the project is expected to be completed only by 2010.

Serum Institute of India’s investment in the project has been divided into separate phases. The company had announced at the time of the SEZ’s inauguration in February 2006, that the first phase of investment would be a minimum of Rs 500 crore and the total investment would build to at least Rs 1,200 crore.

The SEZ, which has been allocated 55 acres of notified land will be gradually expanded to 250 acres. Serum Institute will have five to six units in the SEZ. About a billion doses of various vaccines are expected to be produced on an annual basis from the SEZ. The new zone will make vaccines for pneumonia, rotovirus and combination vaccines for the entire range of meningitis, influenza and Hib.

Serum Institute of India exports its vaccines and anti-cancer products along with anti venom serums in over 145 countries across Asia, Africa, Europe and Central and South America. It also markets a small range of pharmaceutical products in India including seven of Swiss biotech major Merck Serono’s products.

The company is also gearing up to enter the US oncology market. In October 2004, Serum Institute of India had entered into an exclusive agreement with US-based Akorn to develop and market oncological drugs in the US.

Last year, the company also purchased one million Akorn shares at a price of $3.56 each. Akorn is expected to start filing products with the US Food and Drug Administration (FDA) sometime this year.

“There is still time for regulatory filings and it takes close to two years to receive approval to market a product in the US,” said a company official. The products for the US market will also be manufactured at the SEZ.

Serum Institute revenues jumped by 37% to Rs 951 crore in the year ended March 31st, 2007, from Rs 703 crore in last financial year. Revenues for the year ended March 31st, 2005 stood at Rs 505 crore.