Strides Pharma to demerge CDMO, soft gelatin businesses into separate entities

Bengaluru-based 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 demerger of the identified CDMO and Soft Gelatin Business of Strides into Stelis and it also approved demerger of CDMO business of Steriscience into Stelis.

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 rationale behind the demerger is to build a one-of a-kind specialty pharmaceutical Contact Development and Manufacturing (‘CDMO’) powerhouse with capabilities in biologics, oral soft-gels, complex injectables, sterile injectables, including other complex drug delivery systems.

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, specialty injectables, complex generics, biosimilars, and biologics," it added.

Strides shareholders will receive one share of OneSource for every two shares of Strides, swap ratio of 1:2. 

According to investor presentation shared by the company OneSource will become India’s first specialty pharma pure play CDMO and Strides Shareholders will own 44 per cent of the economics of OneSource.

“We expect the Business in FY25 to achieve sales between $180m and $200m with ~30% EBITDA margin based on strong orderbook on all 3 business divisions. OneSource has potential to double its scale in 3-4 years mainly from the momentum from biologics and high-end drug device combinations in GLP-1 products,” Strides said in an exchange notification.

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.

(With PTI inputs)