Biocon wraps up $3 billion acquisition of Viatris
- ByStartupStory | November 30, 2022
The global biosimilars business of Viatris was successfully acquired by Biocon Biologics, the biosimilars manufacturing division of Biocon Ltd., for $3 billion on Tuesday. According to a statement made by the biopharmaceutical company’s parent, Biocon Ltd, the multi-billion dollar acquisition was accomplished using a combination of cash and shares. In addition to issuing compulsorily convertible preference shares (CCPS) worth $1 billion, Biocon Biologics paid $2 billion in upfront cash. The US Federal Trade Commission, the Competition Commission of India, the Reserve Bank of India, and its investors, respectively, have all given their seals of approval to the acquisition deal.
On Tuesday, following the close of the stock markets, the acquisition was announced. On Wednesday, Biocon shares started the day with minimal move and closed with a 0.2% midday loss at Rs 281.50 per share on the BSE. A well-known brand in the pharmaceutical manufacturing sector is Biocon. It produces drugs and other pharmaceutical goods used to treat chronic illnesses like cancer, diabetes, and autoimmune diseases. The acquisition of Viatris is seen as an extension of Biocon Biologics and will aid the business in improving its infrastructure supporting its commercial capabilities. According to the statement, the company currently produces 20 biosimilar assets, including insulins and others linked to monoclonal antibodies that cover therapy areas like diabetes, oncology, immunology, and ophthalmology.
“An important turning point in Biocon Biologics’ journey to become a world-leading, fully integrated biosimilars enterprise dedicated to meeting patients’ needs for accessible, affordable biomedicines has been reached with the completion of the acquisition of Viatris’ global biosimilars business. Our direct entry into a number of developed and emerging markets will be accelerated by this “the executive chair of Biocon Biologics, Kiran Mazumdar Shaw, stated.
To prevent any disruptions to the business operations, Viatris will continue to work with the teams and on its current projects for another two years. Compulsorily Convertible Preference Shares (CCPS) worth $1 billion were issued by Biocon Biologics, giving the company an equity stake of at least 12.9% when fully diluted. It received a $ 2 billion upfront cash payment from Viatris.
In the event that this deal is successful, Biocon Limited will hold a 68% share in Biocon Biologics. The payment was accelerated by Biocon Biologics using money from its $1.2 billion Sustainability Linked Loan (SLL). The remaining amount was paid through an equity infusion by Biocon Limited and Serum Institute Life Sciences totaling $650 million and $150 million, respectively. The $230 million in funding for Biocon Limited comes from existing reserves, and the remaining $420 million is provided by mezzanine financing. After the deal closes, the company will try to attract additional investments to pay off the mezzanine financing.
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