Serum Institute of India throttles back on equity sale

The Serum Institute of India's plans to raise as much as $12 billion by offering equity in Asia's largest vaccinemaker are on hold, for now, as global market volatility stands in the way of valuation.

Serum Institute Chairman Cyrus Poonawalla

Serum Institute owner and Chairman Cyrus Poonawalla told Reuters this week that major investors from private equity to sovereign wealth funds were gun-shy right now and that efforts to sell a 10% stake that started two months ago are on hold.

"They indicated it would be difficult for them to dish that much out right now," Poonawalla told Reuters.

"Naturally, we weren't going to accept a lower valuation just because there is a liquidity crunch going on."

Still, Poonawalla told the news agency that there was not an urgent need to raise funds and that the company would reconsider once conditions swing more in his favor--but not in a public listing.

"We don't want to go to the public domain and be accountable to other shareholders and base our decisions on what the market would expect us to do," he told Reuters. "We want to keep our independence on making our decisions."

Earlier this week, the Serum Institute said it is seeking in-country fast-track approval for a biologic drug candidate to treat all four strains of dengue, the Times of India reported, with the news coming amid speculation over an equity offering by the company and a massive virus outbreak in India.

The Serum Institute has tied up with U.S.-based biotechnology company Visterra to use its technology and has set a schedule to commercialize the treatment within 12 to 18 months of getting regulatory approvals, CEO Adar Poonawalla told the Times of India.

In May, Singapore's research agency and Duke-National University of Singapore signed an agreement to collaborate with U.S. biotech Visterra on getting a promising treatment against dengue fever to the clinical-trial stage.

The Agency for Science, Technology and Research (A*STAR) said the trials would also be conducted in Singapore, which is the middle of a region plagued by the virus. There is no specific drug to attack the virus, the agency said.

The work is to be carried out on one of Visterra's antibodies, VIS513, which has shown in animal trials that it is capable of providing a single treatment to slow development of the virus and neutralize all four types of it.

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