Stelis concludes fund raise of US$ 195 million

Strides Pharma Science on Friday, March 19, 2021, said its biotech arm Stelis Biopharma (Stelis) has successfully concluded its Series B and Series C fund raise for a cumulative amount of US$ 195 million (approx Rs 1,415 crore). Post money valuation for Stelis will be pegged at US$ 350 million, underpinning the significant growth potential of the business. With the current capital raise, Stelis is now well-positioned to pursue its growth initiatives and scale its business model to deliver promising returns in the coming years.

Strides Pharma said, Stelis as part of the Series B issue will raise US$ 70 million from existing investors at the current pre-money valuation of US$ 155 million through partly paid shares. The family office of Promoters to lead the funding round with US$ 56 million commitment of which US$ 15 million will be invested immediately, Strides to subscribe the balance US$ 14 million.

The company has also raised an additional US$ 125 million through a Series C funding round including a primary infusion of US$ 85 million in the company and a secondary placement of US$ 40 million for GMS Holdings, our existing shareholder.

The funding round led by TPG Growth followed by other long-term investors namely, Route One, Think Investments and the Mankekar Family. It added, post-money valuation for the business pegged at ~US$ 350 million, a significant value accretion for existing shareholders.

Talking about the way the proceeds of the raised capital will be used, Strides said, the funds will be used in the completion of last-mile CapEx for the CDMO business including setting up of 6KL mammalian block, a ramp-up of process development lab and other technical capabilities. It will also be used in accelerating the vaccine block infrastructure with the ability to cater to multiple vaccine types including viral vector, protein subunit, RNA and DNA. The remaining funds will be used for debt servicing and other general corporate purposes.

The company also said that post-completion on Series C fund raise, Strides to hold 33% (Pre-ESOP) in Stelis with its investment valued at US$ 116 million.

Strides will demerge and list its Biopharma business under Stelis on a standalone basis enabling significant value unlocking for Strides shareholders.

The transaction is subject to approval from shareholders, meeting customary closing conditions and is expected to achieve closure in over 12 months.