Avendus, SBI Life pick up over 2.5% secondaries in Aragen for Rs 300 crore
The fully secondary deal involves the two investors acquiring over 2.5% from the GVK Group's Reddy family's stake in Aragen, Ritesh Chandra, managing partner at Avendus Future Leaders Fund, told TOI.
The transaction marks FLF III's second investment after La Renon Healthcare earlier this year. It gives both investors exposure to a sector positioned to benefit from global pharmaceutical companies diversifying R&D and manufacturing away from China, particularly in novel drug development.
'We are very bullish on the CRDMO space given the strong tailwinds as innovator pharma companies increasingly look to India for drug research and discovery,' Chandra told TOI. He added Aragen's scale, client base, and dual capability in small molecules and biologics made it a differentiated bet. 'We don't typically compete for deals, we prefer to work synergistically with the ecosystem and take nimble, minority positions three to four years before a potential liquidity event.
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Founded in 2001 Aragen, formerly GVK Biosciences, works exclusively on innovative pharmaceuticals, from early discovery to commercial manufacturing, and does not operate in generics. 'We are one of the few fully integrated players in India that can go from concept to commercial, and among the very few that can do both small molecules and biologics,' Manni Kantipudi, CEO of Aragen Life Sciences, told TOI.
The company's new biologics manufacturing facility in Bengaluru, with an initial 2,000-litre single-use bioreactor capacity (expandable to 23,000 litres), began operations this month.
A high potent manufacturing unit in Hyderabad, due in October, will enable production of antibody-drug conjugates, mainly for oncology. 'This capability puts us among a select group in India able to make such targeted therapies,' Kantipudi told TOI.
About 50% of Aragen's revenue comes from drug discovery research, 20-25% from early development and the rest from manufacturing. The US accounts for 65% of its business, followed by Europe at 25%.
'Of the top 10 selling drugs globally, six are biologics. Small molecules remain a mainstay, but biologics offer higher efficacy, greater barriers to entry, and are a growing share of pharma pipelines,' Kantipudi added.
Chandra said FLF III's average hold period is three to three-and-a-half years, with fund life capped at six years. The Aragen deal follows exits such as selling its stake in Juspay to Kedaara Capital and Lenskart to Fidelity. 'Fund sizes and ticket sizes have increased since our first fund in 2019, but the core strategy hasn't changed,' he said.
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