Goldman Sachs is investing Rs 1,125 crore ($150 million) in Biocon Biologics which will value the latter at $3.94 billion. Biocon Biologics is a subsidiary of Biocon.

The Bangalore-based firm on Saturday said the board of its subsidiary approved the capital injection from Goldman Sachs.

According to the terms of the proposed agreement, Goldman Sachs will be issued optionally convertible debentures at a post money equity valuation of $3.94 billion. The transaction is subject to customary approvals and conditions.

The investment will enable Biocon Biologics to make investments in R&D and high-quality manufacturing as well as establish a global commercial footprint.

“We are extremely pleased to welcome a capital injection by Goldman Sachs at this inflection point of Biocon Biologics’ journey in its quest for global leadership in providing affordable access through Biosimilar drugs,” Biocon executive chairperson Kiran Mazumdar-Shaw said.

She added that the transaction is part of the overall strategic plan of value creation for the company’s shareholders through Biocon Biologics

Biocon Biologics said that it is engaged in developing affordable biosimilars (a drug which is similar to a biologic or medicines that are derived from living organisms) that expand patient access to a class of therapies across the world.

The company has one of the largest bio-similar portfolios globally for oncology, immunology and other chronic disease areas.

According to Som Krishna, managing director in the merchant banking division at Goldman Sachs, the global growth of biosimilars is taking place at a rapid pace. He added that Biocon Biologics is well positioned to continue to grow and be a major global player in this dynamic segment of the pharmaceutical industry.

“With three of our products commercialised in the US market, we continue to strive towards expanding access for our patients and unlocking value for our shareholders. This capital injection by Goldman Sachs will enable us to make prudent investments in R&D, high-quality manufacturing as well as establish a global commercial footprint. The company is confident of achieving the aspiration of serving five million patients through its biosimilar portfolio and attaining a revenue target of $1 billion by 2021-22,” Christiane Hamacher, CEO of Biocon Biologics, said.

Shares of Biocon ended with marginal gains of 0.38 per cent at Rs 414.75 on the BSE on Friday.

Biocon Biologics has the full spectrum of insulins in its pipeline and the global scale necessary as it looks to make its presence in the anti-diabetic segment. With the demand for biosimilars expected to grow as patents of originator biologics expire and patients demand lower priced drugs, Biocon Biologics added that it is well positioned to expand access.