Sterling Biotech’s API Formulation Business Now Under Zydus Lifesciences

Zydus Lifesciences, formerly Cadila Healthcare, recently announced its acquisition of Sterling Biotech’s  API (Active Pharmaceutical Ingredients) for cash compensation of Rs 84 crore. The news was announced subsequently after Zydus marked an agreement and acquired a 50% stake in a Temasek-backed food technology company, Perfect Day. According to an exchange filing, the acquisition is anticipated to be concluded by December 31st, 2024.

Zydus Lifesciences is a global life sciences firm concurring a range of healthcare therapies, from drug discovery to marketing. At the same time, Sterling Biotech specializes in manufacturing fermentation-based API products like lovastatin, Doxorubicin, Daunorubicin, and Epirubicin. Zydus, at present, runs a committed fermentation lab that focuses mainly on novel product development. As Zydus especially offers substantial entry barriers and attractive margins, this step orients its strategy to expand in fermentation-based API.

This acquisition allows Zydus to achieve new commercial and strategic goals productively, as setting up a whole new plant would be a lengthy and expensive process. Sterling Biotech reported an increased turnover of Rs 66.8 crore. Animal-free protein products API business sales are part of the prominent focus of Sterling Biotech.

Zydus previously stated, “The purchaser and the seller will also take  a strategic view on the API  and gelatin businesses.” This was followed by its acquisition of a 50% stake in Sterling Biotech. After this reformation, Sterling plans to sell its gelatin business to strategic buyers. In the latest trade on the Bombay Stock Exchange, Zydus Lifesciences shares were seen lower at 0.4%. Moreover, the net sales of Sterling Biotech are seen rising from 433.3 crores to 454.8 crores in March 2024