Strides Pharma to demerge CDMO, soft gelatin biz into separate entity

It would also involve the demerger of the CDMO business of Steriscience into Stelis.The companys board intends to build a specialty pharmaceutical contract development and manufacturing organisation with capabilities in biologics, oral soft-gels, complex injectables, sterile injectables, including other complex drug delivery systems, Strides Pharma Science stated.In this regard, it is proposed to combine the identified CDMO business of Strides and the identified CDMO business of Steriscience under Stelis, it said.

Strides Pharma Science on Monday said its board has approved a scheme of arrangement among group entities to create a separate contract development and manufacturing entity OneSource.

The company's board has approved a scheme of arrangement among Strides Pharma Science, Steriscience Specialties and Stelis Biopharma, the drug firm said in a regulatory filing.

The arrangement will see the demerger of the CDMO (contract development and manufacturing organisation) and soft gelatin business of Strides into Stelis, it stated. It would also involve the demerger of the CDMO business of Steriscience into Stelis.

The company's board intends to build a specialty pharmaceutical contract development and manufacturing organisation with capabilities in biologics, oral soft-gels, complex injectables, sterile injectables, including other complex drug delivery systems, Strides Pharma Science stated.

In this regard, it is proposed to combine the identified CDMO business of Strides and the identified CDMO business of Steriscience under Stelis, it said. The new platform will be able to offer development and manufacturing services covering platform technologies, speciality injectables, complex generics, biosimilars, and biologics, it added.

''We expect this company to be formed through the NCLT process in the next 12 to 18 months considering that there are multiple companies being merged and demerged into the structure,'' Strides Pharma Science Executive Chairperson and Managing Director Arun Kumar said in a conference call.

More importantly, the company will end up in the next three to four years as a very powerful CDMO entity in the pharma space, he added.

Strides expects the OneSource business to achieve sales between USD 180-200 million in FY25.

The implied value of proposed shares issued by OneSource to Stride's shareholders is Rs 364 per share, it added.

As part of the process, Strides shareholders will own 44 per cent of OneSource. The scheme of arrangement is expected to be completed by April 1, 2024. As part of the process, Strides will demerge the oral soft gelatin business and identified the CDMO business into Stelis.

Upon demerger, the shares of Stelis held by Strides will be cancelled, and shareholders of Strides will become shareholders of Stelis.

SteriScience, the promoter group company, will demerge sterile injectables CDMO business into Stelis.

Pursuant to the demerger, Stelis will issue equity shares to the shareholders of Strides and SteriScience on the recommended share entitlement ratio determined by an independent valuer, Strides Pharma Science noted.

Shares of Strides Pharma Science raced to a 52-week high of Rs 549 before closing at Rs 535.65, up by 7.42 per cent, on the BSE.

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