Zydus Lifesciences shares fall 6% post acquisition of Sterling Biotech

Zydus Lifesciences shares slumped as much as 6 per cent to hit an intra-day low of Rs 1,109 on Monday following the company's declaration to enter into an agreement with Perfect Day Inc. for acquiring a 50 per cent stake in Sterling Biotech. The deal amount has not been disclosed. The transaction would make Sterling Biotech a 50:50 joint venture between Zydus Lifesciences and Perfect Day.

The joint venture would establish a manufacturing facility for fermented, animal-free protein to be supplied to the global markets. This acquisition will mark the entry of Zydus in this specialized biotech segment concerned with health and nutrition products for people wanting animal-free protein or those who are lactose intolerant.

The new portfolio will be added to the business by Sterling Biotech, which is currently engaged in the business of manufacturing fermentation-based API products and gelatin. Perfect Day's precision-fermented proteins power a wide range of applications—from ice cream to sports nutrition—offering high functionality with lower environmental impact.

Zydus Lifesciences Managing Director Sharvil Patel said, "We are committed to growth in partnerships and making India an increasingly relevant supply chain location globally." Perfect Day's Interim CEO Narayan TM did appreciate the fact that this would make a remarkable improvement in the capability of the Company towards meeting global market demand.

At 12:09 pm, Zydus Lifesciences shares were trading 4.94 per cent lower at Rs 1,121.90, underperforming the Sensex that was down 0.8 per cent.