- Completes the multi-billion-dollar, value accretive transaction in part-equity and part-cash, including:
- Upfront cash payment of USD 2 billion
- Issuance of CCPS worth USD 1 billion
- Creates a unique, fully integrated, leading global biosimilars enterprise with eight commercialized products
- Accelerates direct commercialization of its biosimilars portfolio in advanced markets and several emerging markets
- Biocon Biologics will recognize the combined revenue & associated profits from the acquired collaboration biosimilars with immediate effect
- Viatris to provide commercial and other services for up to 2 years to ensure a seamless transition and continued service to patients and customers
Biocon Biologics Ltd., a subsidiary of Biocon Ltd. (BSE code: 532523) (NSE: BIOCON), announced today that it has successfully completed its multi-billion-dollar (USD) acquisition of the global biosimilars business of its partner Viatris Inc. (NASDAQ: VTRS).
Biocon Biologics and Viatris have obtained all applicable approvals from key global regulators including the U.S. Federal Trade Commission, the Competition Commission of India and the Reserve Bank of India, and its investors.
Effective from the date of closing, Biocon Biologics will recognize the combined revenue and associated profits from the acquired products, a step-up from the existing profit share arrangement.
Strategic Rationale
The acquisition provides Biocon Biologics with direct commercial capabilities and supporting infrastructure in the advanced markets and several emerging markets, bringing it closer to patients, customers, and payors.
The integration of Viatris’ acquired global biosimilars business and Biocon Biologics’ existing capabilities in research and development, global scale manufacturing and commercialization in several emerging markets positions Biocon Biologics as a unique, fully integrated, leading global biosimilars player that is well placed to provide equitable access to high quality, lifesaving biosimilar medicines to patients across the globe. With this acquisition Biocon Biologics emerges as a world leading biosimilars player with eight commercialized products.
With the closing of the deal, Biocon Biologics has full ownership of its collaboration assets, bTrastuzumab, bPegfilgrastim, bBevacizumab, bGlargine, bAspart, bPertuzumab and bGlargine 300U, as well as 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.
Biocon Biologics has a unique portfolio of 20 biosimilar assets, including insulins and monoclonal antibodies spanning therapy areas such as diabetes, oncology, immunology and ophthalmology. With one of the broadest and deepest biosimilar portfolios in the industry, Biocon Biologics can make a meaningful difference to patients’ lives and deliver significant savings to healthcare systems around the world.
Kiran Mazumdar-Shaw, Executive Chairperson, Biocon Biologics, said: “The completion of the acquisition of Viatris’ global biosimilars business is a historic inflection point in Biocon Biologics’ journey of becoming a world leading, fully integrated biosimilars enterprise, committed to serve patients’ needs for affordable access to essential biomedicines. It 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. I believe this move will strengthen our value proposition to deliver long-term value to Biocon and Biocon Biologics shareholders.”
“To ensure seamless continuity of services to patients and customers, Viatris will continue to work with our teams for a transition period of up to two years. I would like to thank the teams at both Biocon Biologics and Viatris that have worked together to address regulatory and statutory requirements to enable deal closure,” she added.
Robert J. Coury, Viatris’ Executive Chairman, said: “I am extremely pleased to have reached this monumental moment for Biocon Biologics. As a significant shareholder in Biocon Biologics, we are committed to ensuring the long-term success of the company and maximizing the value of what we are building together – a new world-class, fully integrated biosimilars leader.”
The acquisition of Viatris’ global biosimilars business is unique as it cements the long- standing strategic partnership between the two companies, who have been successfully collaborating for more than a decade. As a unique, fully integrated organization driven by a common purpose, Biocon Biologics aspires to expand access and enhance the quality of experience of customers, partners and patients.
Funding of the Transaction
As a part of completing the transaction, Biocon Biologics has issued Compulsorily Convertible Preference Shares (CCPS) in the Company valued at USD 1 billion, equivalent to an equity stake of at least 12.9% on a fully diluted basis, and made an upfront cash payment of USD 2 billion to Viatris.
To fund the upfront payment, Biocon Biologics has secured USD 1.2 billion of Sustainability Linked Loan (SLL). The balance has been funded through an equity infusion of USD 650 million by Biocon Limited and USD 150 million by Serum Institute Life Sciences (SILS). Biocon Limited’s funding comprises USD 230 million from existing reserves and USD 420 million through mezzanine financing. Biocon is in the process of securing investments to retire the mezzanine financing, post deal closure.
Post conclusion of the Viatris and Serum transactions, Biocon Limited’s stake in Biocon Biologics will be 68%.
Sustainability Linked Loan
Under the SLL, Biocon Biologics has committed to achieve progress on important sustainability linked Key Performance Indicators (KPIs) related to (i) Improving biosimilars access, (ii) Enhancing diversity and inclusion in the workforce; (iii) Increasing the use of green power; and (iv) Reduction in fresh water consumption.
This is the largest SLL linked loan among pharmaceutical and biomanufacturing companies in the Asia-Pacific region, reaffirming Biocon Group’s commitment to ensure sustainable performance across the operational, financial, environmental, social and governance facets of its businesses.
Ensuring Smooth Transition
To ensure seamless business continuity and allow for a gradual integration of people and business activities, Viatris will provide commercial and other transition services to Biocon Biologics for up to two years. The two companies have also put in place Governance Committees and an Integration Management Office to ensure smooth execution and integration during the transition period.
Rajiv Malik, President of Viatris, has joined the Board of Directors of Biocon Biologics Ltd, effective Nov 29, 2022. Kiran Mazumdar-Shaw will continue as the Executive Chairperson of Biocon Biologics Ltd.
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