Mumbai: Felix Pharmaceuticals is looking to sell a controlling stake in its subsidiary, Felix Generics, which makes veterinary drugs for ‘companion pets’ such as dogs and cats, three people with knowledge of the development said.
The Ireland-headquartered Felix Pharmaceuticals, which is eyeing a valuation of around $200-250 million for the controlling stake in its Gurugram-based subsidiary, is in talks with mid-sized and buyout private equity (PE) firms for the deal, the people cited above said on condition of anonymity.
The first person cited above said that the company has appointed investment bank Lincoln International to help it look for investors. According to the person, Felix is likely to sell anything above 51% to a PE firm. The second person added that even after the deal, the founders will retain sizeable stake and will continue to run the business alongside the PE investor.
“The deal will help the company raise primary capital alongside secondary exit to the founders,” the first person said. “The primary capital will help the company expand its product basket in the animal health and nutrition and wellness segment.”
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“The management is in talks with mid-sized PE firms and large growth-stage firms for the same,” the second person cited above said, adding that the deal is in early stages and is likely to close next quarter.
The development comes in the backdrop of rising demand for veterinary drugs and pet-care services in the country, with several startups springing up to service the opportunity.
Felix Pharmaceuticals, founded by Neeraj Agrawal, Shumeet Banerji and Sir Jon Symonds, holds 99.99% equity stake in Felix Generics Pvt. Ltd (FGPL).
Emailed queries to Neeraj Agarwal and Lincoln International did not elicit any response till press time. Before founding Felix, Agarwal was the CEO of Jubilant Generics, a subsidiary of Jubilant Lifesciences.
The background
Founded in 2015, FGPL develops and manufactures generic bio-equivalent drugs for companion pets for its parent. It started with oral solid dosage (OSD) formulations for the pets and thereafter expanded its portfolio across other dosage forms such as injectables, oral suspensions and paste.
FGPL’s manufacturing facility is located at Pithampur SEZ in Indore, Madhya Pradesh, which manufactures plain tablets, chewables, soft chewables, oral liquids, and oral pastes with installed capacity of around 150 million tablets per annum, according to data from a report by Care Ratings. The manufacturing site was approved by Health Product Regulatory Authority (HPRA), Ireland, in April 2021 and the US Food and Drug Administration (USFDA) in October 2022.
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Parent Felix Pharmaceuticals sells its products in the US market, a May 2024 ratings report by Care Ratings shows. “Felix Generics has commenced manufacturing products and is now likely to grow at a faster clip,” the second person cited above said.
According to Care Ratings, rising pet ownership is sparking higher demand for veterinary services. “This trend is propelling the market for a wide array of healthcare products for companion animals including medication, vaccines, and dietary aids, among others. Enhanced availability of the veterinary treatments and healthcare products is further driving the veterinary health industry,” it said in the report.
The space is heating up with many pet-care and pet-focused healthcare startups coming up backed by institutional investors. Some D2C petcare startups include Wiggles, Head Up For Tails, Drools and Benny’s Bowl.
In the near term, Care Ratings expects Felix Generics’ revenue to grow at a CAGR of 30-40% “in the near term”, supported by the scale-up of the existing operations and operationalisation of additional capacity.
Source:https://www.livemint.com/companies/felix-pharmaceuticals-seeks-200-250mn-for-controlling-stake-in-pet-drug-subsidiary-felix-generics-amid-booming-market-11740400873827.html