Mankind Pharma signs agreement to buy Panacea Biotec Pharma's domestic biz

Panacea Biotec Pharma is a subsidiary of vaccine maker Panacea Biotec; its domestic biz had a turnover of Rs 219 cr in FY21; Adar Poonawalla holds 8.6% stake in the firm

Mankind Pharma entered into an agreement to buy the domestic formulations business of Panacea Biotec Pharma, a subsidiary of Sputnik V maker Panacea Biotec for Rs 1,908 crore.

In a notification to the stock exchanges on Tuesday, 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 for Rs 1908 crore (exclusive of taxes). Panacea Biotec Pharma and Mankind Pharma entered into a binding term sheet on January 31.

The stocks of Panacea Biotec were up 5 percent on the BSE at the end of day’s trade.

According to reports, Panacea Biotec Pharma was struggling to repay debt and Piramal Enterprises and India Resurgence Fund (IndiaRF) had extended the repayment date last year.

Both Rajesh Jain, MD Panacea Biotec and RC Juneja, chairman of Mankind Pharma could not be reached for an immediate comment.

The domestic business assets generated a turnover of Rs 219.85 crore in the last financial year, which was 63.75 percent of the total revenue of Panacea Biotec Pharma, and around 35 percent of the consolidated turnover of Panacea Biotec.

Panacea Biotec or the parent company 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.

Serum Institute of India CEO Adar Poonawalla holds an 8.59 percent stake in Panacea Biotec, which makes vaccines and pharmaceutical products.