NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, September 14, 2016

“I do see vaccine companies coming up on the block whether it could be in India or it could be abroad,” Adar Poonawalla, head of Serum Institute of India Pvt. Ltd., said in an interview in the company’s headquarters in Pune, India. “This is the lull before the storm. You are going to see either acquisitions or mergers.”

Poonawalla declined to say which companies he expects to come up for sale but added in an e-mail that no other single vaccine company in the developing world would be worth more than $1 billion and so he doesn’t foresee having to spend more than that for an acquisition. Serum was founded by Poonawalla’s billionaire father, Cyrus, who is chairman and India’s seventh-richest man with a fortune of $9.7 billion, according to the Bloomberg Billionaire’s index.

Smaller companies with fewer products and less financial flexibility will become forced sellers as too many players and depressed vaccine prices cause an industry shakeout, Poonawalla said in the interview. His company scrapped plans to sell 5 to 10 percent of his firm to private equity investors last year at a $12 billion valuation in part because the acquisitions he needed the funds for were taken off the market, he said.