Biocon Biologics Ltd (BBL), a subsidiary of Biocon, announced on Monday that it has entered into an agreement with Viatris Inc to acquire its biosimilars business for $3.35 billion, which will include cash of up to $2.33 billion and Compulsorily Convertible Preference Shares (CCPS) in BBL, valued at $1 billion. The deal has been approved by the boards of both the companies.
Following the deal, Viatris President Rajiv Malik will serve on the board of Biocon, while Kiran Mazumdar-Shaw will continue as the Executive Chairperson of BBL.
The transaction is likely to be completed in the second half of 2022. Viatris will receive cash of $2 billion upon closing of the deal and up to $335 million as additional payments expected to be paid in 2024. Upon closing of the transaction, BBL will issue $1 billion of CCPS to Viatris, which is equivalent to an equity stake of at least 12.9 per cent.
BBL said that the cash payment of $2 billion will be funded by the $800 million raised through equity infusion in the company along with debt, additional equity or a combination thereof.
BBL said in a statement that following the deal, it will have one of the broadest and deepest commercialised biosimilars portfolio in the industry. Biocon will have a comprehensive portfolio comprising a range of commercialised insulins, oncology and immunology biosimilars, along with other biosimilars under development. The company also has access to the vaccines portfolio through its recent deal with Serum Institute.
After the closure of the deal, BBL will realise the full revenue and associated profits from the partnered products. Its EBITDA base will be strengthened, enabling investments for sustained long-term growths.
The company said that the deal will lead to operational efficiencies and build agile capabilities in development, manufacturing, regulatory, supply chain and commercialisation in developed and emerging markets.
Kiran Mazumdar-Shaw, Executive Chairperson, Biocon Biologics, said: “The deal will enable BBL to attain a robust commercial engine in the developed markets of US & Europe and will fast-track our journey of building a strong global brand. It will also make us future-ready for the next wave of products. This development takes our partnership with Viatris to the next level to realise our shared purpose of impacting global health by providing affordable access to high quality essential and life -saving Biosimilar drugs.”
Robert J Coury, Viatris’ Executive Chairman said: “Our unique collaboration with Biocon began more than a decade ago, even before a biosimilars pathway was defined in most countries. During that time, we have experienced many successes, and today is no exception as we join together to create a new, uniquely positioned world class vertically integrated biosimilars leader. This transaction will allow Viatris to continue to participate in the global biosimilars space in a more optimised way, while also allowing us to accelerate our own financial priorities.”
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