Fermenta Biotech Limited (FBL), a subsidiary of DIL Limited, and an R&D based innovative multi-platform enterprise focused on specialty biotechnology and pharmaceutical products with significant technology barriers, has been authorised to enter into definitive agreements with Evolvence India Life Sciences Fund (EILSF), a private equity fund exclusively focused on the Indian life sciences industry.
Upon completion of this deal which is expected to close by end of the current financial year, EILSF will hold a minority equity stake of FBL which will be partly through issue of fresh equity from FBL and partly through sale of FBL shares by DIL to EILSF, for a total investment of Rs.40 crore. Allegro Corporate Finance advisors were the exclusive advisors to DIL and FBL on this transaction.
With this infusion of equity, FBL intends to strengthen and broaden its product portfolio with increased focus on R&D initiatives and augmenting its manufacturing facilities. Currently, FBL’s products are largely manufactured at its factory in Mandi, Himachal Pradesh. This would be supplemented with a new state-of-the-art facility in Dahej SEZ, Gujarat which is currently under construction and expected to begin production in mid-2011.
Commenting on the transaction, Peter Bains, chairman, FBL, said ''We are delighted to do this transaction with Evolvence as its a company specialised in investing in life science based growth platforms and we see this investment in FBL as a strong endorsement of our company’s ongoing strategy to build and deliver future growth and value to our shareholdeRs.Fermenta has embarked on a strategy to strengthen and broaden its portfolio of products and to expand its manufacturing capacity to meet growing demand. The funds invested in FBL will enable us to consolidate and accelerate these initiatives while allowing us to dedicate additional resources to our research efforts. In particular, Fermenta is focused on consolidating growth in its expanding Vitamin D3 franchise and in accelerating commercialization of its novel enzymes for use in manufacturing semi-synthetic antibiotics.''
Most of FBL’s technology platforms and products have either been developed through in-house or collaborative research and development efforts or acquired from third-party innovatoRs.
FBL is best known for its pioneering work in introducing PGA biocatalysts into the Indian pharmaceutical industry in the late 1980s’ for the manufacture of intermediates for semi synthetic penicillins. With the launch of its range of PGA enzymes, FBL was singularly responsible for converting all the manufacturers at that time to an efficient and eco-friendly enzymatic process. Continuing its research focus on biocatalysts, FBL has developed a novel IP protected NPGA enzyme for use in the manufacture of semi synthetic penicillin APIs’ which completely eliminates the use of highly polluting chemical solvents currently in practice, to a largely biocatalytic process with a large green foot print. FBL’s NPGA enzyme is now in the late development and early commercialization phase. Currently there is only one other known global manufacturer to commercially use similar proprietary enzyme technology. With the pressure on all global manufacturers to move towards greener and environmentally friendly and sustainable processes, the role of bio catalysts becomes significantly important and FBL continues to dedicate its research and development resources to enable it to play an important role in this global transformation.
DIL Limited, earlier known as Duphar Interfran Limited consolidated its pharmaceutical interests into its subsidiary FBL following the demerger of its formulation business to Solvay (now acquired by Abbot).
Evolvence India Life Sciences Fund, Mauritius, is a Private Equity Fund that provides growth capital to established companies in pharmaceutical, medical device, and medical services segments of the Indian healthcare sector. Examples of investments include providing capital for capacity expansion, development of generic versions of drugs facing patent expiry, and domestic and international acquisitions.