INDIA – Biocon Biologics, a Biocon subsidiary, has announced that it will purchase Viatris’ biosimilars business for US$3.3 billion in cash and stock.

Viatris will receive US$2 billion in cash at the transaction’s close, as well as up to US$335 million in additional payments due in 2024.

In addition, upon completion of the transaction, BBL will issue US$1 billion in compulsorily convertible preference shares (CCPS) to Viatris, representing a fully diluted equity stake of at least 12.9% in the company.

The transaction has been approved by the boards of directors of both companies.

Kiran Mazumdar-Shaw, Executive Chairperson, Biocon Biologics (BBL), said: “This acquisition is transformational and will create a unique fully integrated, world leading biosimilars enterprise.“

“This strategic combination brings together the complementary capabilities and strengths of both partners and prepares us for the next decade of value creation for all our stakeholders,” she added.

The companies will also sign a Transition Services Agreement, under which Viatris will provide certain transition services, including commercialization services, for a two-year period.

Viatris will also pay Biocon Biologics Limited (BBL) US$50 million to fund certain capital expenditures.

BBL will acquire Viatris’ global commercial infrastructure in developed and emerging markets, as well as its global biosimilars business, which is expected to generate US$875 million in revenue and EBITDA of US$200 million in fiscal year 2022 and to exceed US$1 billion in revenue the following year.

The deal will expand Biocon’s biosimilars portfolio of 20 treatments by adding therapies used to treat diabetes, tumors, and autoimmune diseases and commercializing them for developed markets.

The transaction is expected to close in the second half of 2022, assuming all closing conditions are met, including certain regulatory approvals.

BBL will also acquire Viatris’ rights to all biosimilar assets, including its in-licensed portfolio, as well as the option to acquire Viatris’ rights to Aflibercept.

The US$2 billion cash payment will be funded by US$800 million raised through equity infusion in BBL, with the remainder funded by debt, additional equity, or a combination of the two.

BBL has received expressions of interest for debt financing from financial institutions, as well as equity commitments from existing shareholders.

Biocon Biologics and Viatris already have a comprehensive collaboration agreement in place that allows them to develop, manufacture, and commercialize a diverse portfolio of biosimilars and diabetes generic drugs, including insulin injection Semglee.

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