Rajiv Malik, the President of Viatris, will join the Biocon board of directors, while Kiran Mazumdar-Shaw will remain the Executive Chairperson of BBL.

 

Biocon Biologics Ltd (BBL), a Biocon subsidiary, stated on Monday that it has reached an agreement with Viatris Inc to buy its biosimilars business for $3.35 billion, including up to $2.33 billion in cash and $1 billion in Compulsorily Convertible Preference Shares (CCPS) in BBL. Both firms’ boards of directors have given their approval to the merger.

Following the agreement, Viatris President Rajiv Malik will join the Biocon board of directors, while Kiran Mazumdar-Shaw will remain as BBL’s Executive Chairperson.

The deal will most likely close in the second half of 2022. Viatris will receive $2 billion in cash at the close of the sale, plus up to $335 million in future payments due in 2024. BBL will issue Viatris $1 billion in CCPS upon completion of the acquisition, which is equivalent to a 12.9 percent ownership share.

The $2 billion cash payment will be covered by the $800 million raised through an equity investment in the company, as well as debt, more stock, or a mix of the three, according to BBL.

BBL said in a statement that as a result of the transaction, it will have one of the industry’s widest and deepest commercialised biosimilars portfolios. Biocon will have a diverse portfolio of commercially available insulins, oncology and immunology biosimilars, as well as biosimilars in development. Through a recent agreement with Serum Institute, the company now has access to the vaccination portfolio.

BBL will realise the full income and associated profits from the partnered items after the contract is closed. Its EBITDA base will be bolstered, allowing it to invest for long-term growth.

The agreement will result in operational efficiencies and the creation of agile capabilities in development, production, regulatory, supply chain, and commercialization in developed and emerging markets, according to the company.

“The acquisition will help BBL to achieve a robust commercial engine in the developed markets of the US and Europe, and will fast-track our journey of developing a strong worldwide brand,” said Kiran Mazumdar-Shaw, Executive Chairperson, Biocon Biologics. It will also prepare us for the next generation of products. This development takes our relationship with Viatris to the next level, allowing us to achieve our shared goal of improving global health by offering affordable access to high-quality biosimilar pharmaceuticals that are both critical and life-saving.”

“Our unique relationship with Biocon began more than a decade ago, even before a biosimilars pathway was specified in most countries,” said Robert J Coury, Viatris’ Executive Chairman. We’ve had many triumphs throughout that time, and today there is no exception as we join forces to become a new, world-class vertically integrated biosimilars company. Viatris will be able to continue to compete in the global biosimilars field in a more efficient manner as a result of this deal, while also advancing our own financial interests.”