According to drugmaker Biocon, Syngene is India's largest and Asia's second largest contract research organisation (CRO) but in January the company announced it had sold a 10% stake and was looking to commence an initial public offering (IPO).
Now the firm has filed a Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI), offering to sell its 84.5% equity stake in the CRO.
Up to 22 million shares at a face value of 10 INR ($0.16) could be sold through the IPO in what Biocon's Managing Director Kiran Mazumdar-Shaw said would unlock "value from Syngene to fund our RnD programs, which include a rich pipeline of biosimilars and novel biologics."
Syngene offers end-to-end discovery and development services for pharma companies, for both small molecules and biopharmaceuticals.
A potential spin-out for Syngene would help the company "evolve from a CRO into a full-fledged Contract Research and Manufacturing Services company," according to CEO Peter Bains.
According to the DRHP, Syngene expects to benefit from expected growth in the R&D outsourcing market through its infrastructure, which includes 900,000sq ft of laboratory and manufacturing space in Bengaluru,India, and its client base.
In the nine months up to December 2014, "we serviced 195 clients including seven of the top 10 global pharmaceutical companies," the firm says. "We have longstanding, extensive relationships with multinational clients such as BMS, Baxter, and Merck & Co, as well as emerging small- to mid-sized companies."
The DRHP comes as Biocon announces end of fiscal year earnings which saw Syngene outperform itself, delivering 27% growth for the fourth quarter year-on-year with sales of 2.4bn INR ($38m).
"Biocon closed the year with a stronger performance in Q4 on the back of a record quarterly performance by our Research Services subsidiary, Syngene and an improved performance of our Biopharma business," Mazumdar-Shaw said.