India Pharma Outlook Team | Monday, 28 February 2022
Biocon Biologics Ltd (BBL) the subsidiary of Biocon on Monday said it has entered into a definitive agreement to acquire Viatris’ biosimilars assets for $3.34 billion. Out of $3.34 billion, BBL will pay Viatris up to $2.34 billion in cash and the rest $1 billion through Compulsorily Convertible Preference Shares (CCPS) in BBL for an equity stake of at least 12.9% in the company.
The transaction is expected to close in the second half of 2022. BBL said the cash payment of $2 billion to be funded by $800 million raised through equity infusion in BBL and the remainder to be funded by debt, additional equity or a combination.
"BBL has received expressions of interest from financial institutions for debt financing and equity commitments from existing shareholders," it added. BBL existing investors include Serum Institute of India, Abu Dhabi-based ADQ. True North, Tata Capital Growth Fund and Goldman Sachs. Kiran Mazumdar-Shaw continues as executive chairperson of BBL; Rajiv Malik, president of Viatris, will join the BBL board.
As part of the deal, BBL will get Viatris’ global commercial infrastructure in developed and emerging markets. Viatris’ global biosimilars business with an estimated revenue of $875 million and EBITDA of $200 million for calendar year
2022, which is estimated to exceed $1 billion in revenue next year. Viatris’ rights in all biosimilars assets including its in-licensed portfolio and an option to acquire Viatris’ rights in biosimilar Aflibercept used to treat wet macular degeneration. Viatris will also pay transition services for an expected two-year period to ensure a seamless transition with partners and continued services to patients and customers.
Viatris also will pay $50 million to BBL to fund certain capital expenditures. Biocon and Viatris (formerly called as Mylan) have partnered to develop and commercialise a broad portfolio of biosimilar and insulin products such as human insulin, insulin glargine, aspart; trastuzumab, bevacizumab, pegfilgrastim and in-licensed products adalimumab and etanercept.
While Biocon develops and manufactures the drug, Viatris takes care of regulatory approvals and commercialization of products in the highly regulated markets such as US, Canada, Japan, Australia, New Zealand and EU. Biocon has co-exclusive commercialisation rights with Viatris in the rest of the world. “This acquisition is transformational and will create a unique fully integrated, world leading biosimilars enterprise," said Mazumdar-Shaw.
“The deal will enable BBL to attain a robust commercial engine in the developed markets of the U.S and 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,” she added. “This transaction will allow Viatris to continue to participate in the global biosimilars space in a more optimized way, while also allowing us to accelerate our own financial priorities,” said Robert J. Coury, Viatris’ executive chairman.
