Pharmaceutical ingredients maker Laurus Labs Ltd. has found its “fourth lever of growth” in the biotech space, according to its Chief Executive Satyanarayana Chava, and its most recent acquisition will fast-track this ambition.
“The gestation period to enter the biotech space is a 6-7-year period,” he told BloombergQuint’s Menaka Doshi in an interview. “Our idea is to cut down this gestation period significantly by making an acquisition.”
Laurus Labs, on Nov. 26, closed a Rs 250-crore deal to acquire a majority stake in Richcore Lifesciences, marking its entry into the biotech space and adding to its existing three divisions – active pharmaceutical ingredients, formulations and synthesis. The startup’s promoters and management will continue to run the business while Laurus Labs—having acquired just over 72% stake—will allow the company to scale its manufacturing.
The acquisition marks Laurus Labs’ entry into the broader biologics and biotechnology segments, providing the company access to its high growth areas, globally and in India. Following the successful closure of the transaction, Richcore will be renamed as Laurus Bio Pvt.
Chava expects a significant return from the investment to come from Richcore’s contract manufacturing of recombinant proteins. The startup’s first large-scale facility —with a 2,50,000 litre capacity—will be ready by March 2021.
“That’s where the quantum jump in revenues will come from.” Richcore clocked Rs 30 crore revenue in its first six months of this financial year.
Another such facility is slated to be built by the end of 2021.
Shares of Laurus Labs gained as much as 4.8% in today’s trade to Rs 298.8 apiece. The stock is the third best performer on the BSE 500 index on a year-to-date basis, with gains of over 300%.
Watch the full conversation here.
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