ICICI Venture (I-Ven), the country’s largest private equity player, appears to be on exit mode from its healthcare and lifescience investments.

VCCircle has learnt that ICICI Venture is exploring ways to exit from Bharat Biotech, the Hyderabad-based biotechnology major which is into vaccines, biopharma and contract research. According to sources, the talks are at a preliminary stage and the exit route (secondary transaction or strategic sellout) is yet to be decided. I-Ven holds about 11% in Bharat Biotech while IFC holds a minority stake in the biotech firm.

I-Ven invested in the company in 2005 from its India Advantage Fund Series 1. “ICICI Venture just started its discussion with the promoters for a possible exit and not even mandated any bankers. Following Sanofi’s buyout of Shantha Biotechnics, ICICI Venture received a lot of interest for its stake in Bharat Biotech,” a source close to the development said. A year back, in a $781-million deal, Sanofi-Aventis acquired controlling stake in Hyderabad-based Shantha, which was earlier snapped up by French Merieux Alliance. 

The Rs 250-crore Bharat Biotech, promoted by Dr. Krishna Ella, a first generation entrepreneur and former assistant professor, Medical University of South Carolina in 1996, commenced commercial production in 1998 with the launch of Hepatitis B vaccine. Bharat Biotech is also a WHO pre-qualified manufacturer of Hepatitis-B vaccines for supply to UNICEF and global procurement agencies. Bharat Biotech is conducting clinical research of vaccines for chikungunya, malaria, rotavirus and pandemic influenza. It develops a combination vaccine for hepatitis-B, DPT and Hib (Haemophilus influenzae type B). It also set to launch swine flu vaccine in India.

Mails sent to Bharat Biotech officials and ICICI Bank spokesperson did not elicit any response at the time of posting this report.

Last month, VCCircle had reported on ICICI Venture’s plans to exit from I-Ven Medicare India Pvt. Ltd, a special funding vehicle aimed at investing in hospitals, also part of India Advantage Fund Series 2. ICICI Venture started its talks with India Value Fund Advisors (IVFA) Pvt. Ltd to sell a majority stake.

In June, VCCircle had first reported ICICI Venture's plan to sell I-Ven Pharma Capital Limited, a Special Purpose Vehicle, to Dr Reddy's Labs (DRL), its exclusive partner in the SPV. ICICI Venture had invested Rs 100 crore and holds 100% stake in I-Ven Pharma, created in 2005 for the purpose of funding research, development and commercialization of pharma products by DRL for the US market. ICICI Venture had exited from Perlecan Pharma, which was formed in 2005 as a JV between Citigroup Venture, DRL and ICICI Venture for funding R&D activities.

Recently, ICICI Venture exited from diagnostic chain Metropolis Healthcare in a secondary transaction with Warburg Pincus. ICICI Venture had invested Rs 35 crore in Metropolis from its India Advantage Fund Series-1 in 2006 and held around 20-25% stake in the firm. According to an earlier Business Standard report, ICICI Venture is looking for an exit from Ranbaxy Fine Chemicals, which was part of Ranbaxy Laboratories. Media reports also suggest that ICICI Venture is likely to offload part of its stake in Arch Pharmalabs through the latter’s IPO expected later this year.

ICICI Venture has made significant investments in the lifescience and healthcare space. Recently, it announced an investment of Rs 120 crore ($27 million) in Star Health and Allied Insurance Company Limited from its latest fund. Its other portfolio companies include Radiant Research Inc., Onconova Therapeutics Inc., Swiss Biosciences AG. It exited from its investments in Intas Pharma, Malladi Drugs, Biocon, Avesthagen and Medicorp Technologies.

In 2010, only one exit took place in healthcare space through an IPO, where BTS India PE fund exited Parabolic Drugs Ltd that floated IPO in June. According to VCCEdge data, since 2002, 14 PE exits worth $818 million took place through M&A route.

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