Panacea Biotec subsidiary to sell domestic biz assets

India's Panacea Biotec Pharma, a subsidiary of vaccine maker Panacea Biotec (NSE: PANACEABIO), is to sell its domestic formulations business for $255 million to Mankind Pharma. The transaction is expected to complete in the current fiscal year.

Serum Institute of India's chief executive Adar Poonawalla holds an 8.6% stake in the Panacea parent company.

The shares of Panacea Biotec were up 5% at 251.25 rupees on the Bombay Stock Exchange at the close of trading today.

Panacea Biotec holds the licence to manufacture the Russian COVID-19 vaccine Sputnik V.

The company's domestic business gets the majority of its revenues from therapeutic segments such as organ transplantation, diabetes, pain, cough and cold and gastroenterology.

Panacea has been struggling with high debt. The company has a net debt of $131 million on a consolidated basis.

In a notification to the stock exchanges, Panacea Biotec said that its board approved the decision to sell the domestic formulations business including formulations brands in India and Nepal, related trademarks, copyrights, etc, of its subsidiary Panacea Biotec Pharma to Mankind Pharma. A binding term sheet was entered into by both firms on January 31.

The domestic business assets generated turnover of $21 million in the last financial year, which was 63.75% of the total revenue of Panacea Biotec Pharma, and around 35% of the consolidated turnover of Panacea Biotec.

The parent company Panacea Biotec had transferred its pharma formulations business, formulations facility at Baddi, related R&D and natural products extraction activities at Lalru to its wholly-owned subsidiary Panacea Biotec Pharma in 2020.

Last month, Mankind Pharma had announced its foray into the critical care space by launching a dedicated division for life-saving injectables, and with products ranging from anti-infectives to stroke and trauma management. Frequent stock-outs of critical-care products during the COVID-19 pandemic is said to have urged Mankind Pharma to step in and support the industry with products that are vital in the resuscitation of critically ill patients.