Biocon Ltd.’s subsidiary Biocon Biologics Ltd. announced the completion of acquisition of the global biosimilars business of its partner Viatris Inc.
The company has obtained all applicable approvals from key global regulators including the U.S. Federal Trade Commission, the Competition Commission of India, the Reserve Bank of India and its investors, it said in its exchange filing.
Biocon Biologics will recognise the combined revenue and associated profits from the acquired collaboration biosimilars with immediate effect.
Funding The Deal
For the transaction, Biocon Biologics issued compulsorily convertible preference shares of $1 billion (around Rs 8,000 crore), equivalent to an equity stake of at least 12.9%, and made an upfront cash payment of $2 billion (around Rs 16,000 crore) to Viatris.
To fund this, the company secured a sustainability-linked loan of $1.2 billion and funded the balance through an equity infusion of $650 million by Biocon Ltd. and $150 million by Serum Institute Life Sciences.
Post conclusion of the Viatris and Serum transactions, Biocon Ltd.’s stake in Biocon Biologics will be 68%.
Biocon Biologics has received the largest sustainability-linked loan among pharmaceutical and bio-manufacturing companies in the Asia-Pacific region, and has committed to perform on certain sustainability indicators like improving biosimilars access, enhancing diversity and inclusion in the workforce, increasing the use of green power and reducing fresh water consumption.
Biocon Biologics is expected to emerge as a world-leading biosimilars player with eight commercialised products.
Biocon Biologics will now have full ownership of its collaboration assets—bTrastuzumab, bPegfilgrastim, bBevacizumab, bGlargine, bAspart, bPertuzumab and bGlargine 300U.
Viatris’ rights for the in-licensed immunology products of bAdalimumab and bEtanercept.
Biocon Biologics has also acquired Viatris’ rights for bAflibercept, which is used to treat several ophthalmology conditions. Viatris has been the ‘first to file’ bAflibercept in the U.S.
“It (the acquisition) will fast-track our direct entry into several advanced and emerging markets. This acquisition builds on our decade-long partnership and will enable us to realize our vision of addressing global health inequities,” Kiran Mazumdar-Shaw, executive chairperson at Biocon Biologics, said in the filing.
To ensure seamless continuity of services to patients and customers, Viatris will continue to work with their teams for a transition period of up to two years, Mazumdar-Shaw said.
Impact on Biocon Ltd.
Biocon’s funding comprises $230 million from existing reserves and $420 million through mezzanine financing.
“Biocon is in the process of securing investments to retire the mezzanine financing, post deal closure,” the company said in the filing.