Indian pharmaceutical giant Zydus Lifesciences has acquired a 50% stake in Sterling Biotech from Perfect Day, entering into a 50:50 joint venture with the animal-free dairy firm.

Mumbai-based manufacturing company Sterling Biotech was purchased by Perfect Day from bankruptcy for $78 million in 2022.

Sterling Biotech manufactures and sells fermentation-based active pharmaceutical ingredient products (also known as API ingredients) and gelatine. Perfect Day and Zydus say they have a ‘clear vision’ of focusing on animal-free protein products through the JV and will take a strategic view on the API and gelatine business.

Under the JV, the companies will establish a manufacturing facility to make fermented animal-free protein for global markets. The firms expect the partnership to accelerate the production of high-quality and eco-friendly protein products, catering to the growing consumer demand for fermentation-based, ethically sourced and sustainable nutrition.

The acquisition marks Zydus’ foray into specialised biotech products for health and nutrition – the products made under the JV will “specifically cater to consumers who prefer animal-free protein or suffer from lactose intolerance,” Zydus said.

Perfect Day creates dairy proteins, including casein and whey, without the involvement of cows. Its animal-free proteins have high functionality benefits and a significantly lower environmental impact than traditional dairy production. Today, Perfect Day’s precision-fermented protein is found in various products, including:

🍦 Ice cream – In February, Perfect Day partnered with Unilever to launch animal-free dairy ice cream under Unilever's Breyer's brand

🧀 Cream cheese – In December 2022, Bel Brands USA launched Nurishh Incredible Dairy cream cheese spread, using Perfect Day's precision-fermented dairy

⚽ Sports nutrition – July last year saw the launch of the 'first-ever' hybrid protein powder when Unico Nutrition introduced Apollo II, blending Perfect Day's whey protein with Unico's traditional dairy protein

🥛 Milk – Bored Cow now sells Original, Strawberry, Chocolate and Pumpkin Spice-flavoured animal-free milk, made using Perfect Day's protein, in all 50 US states

The JV will result in Perfect Day ‘significantly’ boosting its technological capabilities in India, which is part of its emerging market growth strategy, while Zydus will continue to leverage its strong manufacturing and commercial expertise within the nation.

India is the world’s largest milk producer and currently contributes 25% of global milk production. According to Zydus, the JV aims to make India a ‘bright spot’ in the global supply chain of sustainable proteins to reduce the environmental impact of food production within India, meeting the growing demand for ethically sourced and sustainable nutrition.

Sharvil Patel, managing director at Zydus Lifesciences, said: “We are dedicated to promoting growth through partnerships and are consistently exploring new collaborations to position India as a premier global supply chain hub. We are excited to join forces with Perfect Day and create a win-win combination that leverages both our strengths and expertise to create value for the consumers.”

Narayan TM, Interim CEO at Perfect Day, added: “This partnership allows Perfect Day to significantly boost its capabilities to meet the demands of the fast-growing global market. We deeply value our collaboration with Zydus and believe this joint venture will allow both parties to benefit from each other's expertise.”

Once the transaction is complete, both Zydus and Perfect Day will have equal representation on Sterling Biotech’s board. NovaaOne Capital Private is acting as an exclusive financial advisor to Perfect Day for this transaction, of which financial terms were not disclosed.

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