Biocon Biologics acquires Viatris's biosimilars biz for $3.33 bn
BBL will gain access to Viatris global biosimilars business estimated to be of $1-bn revenues in US & EU; Viatris will receive cash consideration of $2 bn on the closing of the transaction and up to $335 mn as additional payments expected to be paid in 2024; Additionally, upon closing of the transaction, Biocon Biologics will issue $1 bn of CCPS to Viatris, equivalent to an equity stake of at least 12.9% in the company
image for illustrative purpose
The acquisition will help Biocon get a comprehensive portfolio, comprising its current range of commercialised insulins, oncology and immunology biosimilars as well as several other biosimilar assets under development
Bengaluru: Biocon Biologics Ltd (BBL), a subsidiary of Biocon, has entered into a definitive agreement with its partner Viatris Inc to acquire Viatris' biosimilars business for $3.34 billion. Out of the total acquisition cost of $3.34 billion, the component will be to the tune of $2.34 billion and Compulsorily Convertible Preference Shares (CCPS) in BBL will be the rest $1 billion.
"This acquisition is transformational and will create a unique fully integrated, global biosimilars enterprise. The deal will enable Biocon Biologics 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," said Kiran Mazumdar Shaw, executive chairperson of Biocon Biologics.
Viatris will receive cash of $2 billion upon closure of the deal and up to $335 million as additional payments in 2024. BBL would also issue CCPS worth $1 billion to Viatris, the company said in a statement on Monday.
According to the company, the deal has been approved by the boards of both companies, while the transaction is likely to be completed in the second half of 2022.
Post this acquisition, Viatris President Rajiv Malik would now serve on the board of Biocon, while Mazumdar-Shaw would continue as the executive Chairperson of BBL.
With the deal, Biocon Biologics will acquire Viatris' global commercial infrastructure in developed and emerging markets, its global biosimilars business with an estimated revenue of $875 million and EBITDA of $200 million for 2022, which is estimated to exceed $1 billion in revenue next year.
Biocon Biologics will also obtain Viatris' rights in all biosimilars assets, including its in-licensed portfolio and an option to acquire Viatris' rights in bAflibercept.
According to the statement, while the cash payment of $2 billion will be funded by $800 million raised through equity infusion in Biocon Biologics and the remainder will be funded by debt, additional equity or a combination of both. BBL has received expressions of interest from financial institutions for debt financing and equity commitments from existing shareholders, it added.
