Biocon Biologics To Acquire Viatris' Biosimilars Assets For Up To USD 3.335 Billion In Stock And Cash
Immediately Accretive Combination Creates a Unique Global, Vertically Integrated Biosimilars Leader
- Biocon Biologics Limited’s (BBL) acquisition of Viatris’ rights in biosimilars assets, creates a unique global, vertically integrated biosimilars leader
- BBL will realize full revenues and profits from this business
- BBL will gain Viatris’ global biosimilars business whose revenues are estimated to be USD 1 billion next year, along with its portfolio of in-licensed biosimilar assets
- This transaction accelerates BBL’s direct commercialization strategy for its current and future biosimilars portfolio
- Viatris to provide commercial and other transition services for an expected period of two years to ensure continuity of customer service and smooth transition to BBL
- Deal to be value accretive to Biocon and BBL shareholders and is structured as part-cash, part-equity
- Debt finance supported by larger EBITDA base (consolidation of BBL, Viatris and SILS income streams) and future equity infusion
- Kiran Mazumdar-Shaw continues as Executive Chairperson of BBL; Viatris to designate Rajiv Malik, President of Viatris, to serve on BBL Board
Biocon Biologics Ltd., a subsidiary of Biocon Ltd., announced today that it has entered into a definitive agreement with its partner Viatris Inc. Accordingly, Biocon Biologics Ltd. (BBL) will acquire Viatris’ biosimilars business to create a unique fully integrated global biosimilars enterprise. Viatris will receive consideration of up to USD 3.335 billion, including cash up to USD 2.335 billion and Compulsorily Convertible Preference Shares (CCPS) in BBL, valued at USD 1 billion.
The Board of Directors of both companies have approved the transaction.
BBL will have a comprehensive portfolio comprising its current range of commercialized insulins, oncology and immunology biosimilars as well as several other biosimilar assets currently under development. BBL also has access to the vaccines portfolio through its previously announced partnership with Serum Institute Life Sciences (SILS).
Kiran Mazumdar-Shaw, Executive Chairperson, Biocon Biologics, said: “This acquisition is transformational and will create a unique fully integrated, world leading biosimilars enterprise. Our long-standing global partnership with Viatris has enabled us to achieve many firsts, setting new benchmarks for the global biosimilars industry. 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.”
“The deal will enable BBL to attain a robust commercial engine in the developed markets of U.S. & 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. This development takes our partnership with Viatris to the next level to realize our shared purpose of impacting global health by providing affordable access to high quality essential and life -saving Biosimilar drugs,” she added.
Dr Arun Chandavarkar, Managing Director, Biocon Biologics, said: “By combining the biosimilars business of Viatris to create a global, vertically integrated business in BBL, we are confident of unlocking significant value for our stakeholders. This deal gives BBL full ownership of Viatris’ rights in biosimilars assets, enabling us to recognize combined revenues and profits. To ensure a seamless transition and continued service to patients and customers, Viatris will provide commercial and other transition services to BBL for an expected period of two years.”
“This deal provides several advantages, including strategic agility and operational efficiencies, which will help us mitigate pricing pressures in a competitive global biosimilars landscape. We remain committed to sustainable growth with a strong financial profile, expanded geographical reach and continued investments in R&D to build a world-leading biosimilars franchise. We believe that as a fully integrated global company, we will be able to enhance patient access and reduce healthcare inequities worldwide,” he added
Robert J. Coury, Viatris’ Executive Chairman said: “Our unique collaboration with Biocon began more than a decade ago, even before a biosimilars pathway was defined in most countries. During that time, we have experienced many successes, and today is no exception as we join together to create a new, uniquely positioned world class vertically integrated biosimilars leader. 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.”
Compelling Strategic Rationale
Post closure of the deal, BBL will realize the full revenue and associated profits from its partnered products; a step-up from its existing arrangement with Viatris.
The deal will expand BBL’s EBITDA base and strengthen overall financials, enabling investments for sustained long- term growth.
Synergises End- to- End Capabilities
Our longstanding relationship with Viatris and experience in co-development of products positions us well to maximize value from this transaction for all our stakeholders.
The deal will lead to operational efficiencies across the complete value chain and build agile capabilities in development, manufacturing, regulatory, supply chain and commercialization in developed and emerging markets.
Expands Global Reach
Combining Viatris’ biosimilars business with BBL accelerates the build out of our commercial capability in developed markets in order to become a strong global brand with a direct presence in U.S., Europe, Canada, Japan, Australia and New Zealand.
Large Biosimilars Portfolio
BBL currently has a portfolio of 20 biosimilars. The acquisition of biosimilars assets of Viatris significantly strengthens BBL’s position in providing affordable access to patients through its portfolio in diabetes, oncology, immunology and other non-communicable diseases. It also prepares BBL for greater success with the commercialization of its future pipeline.
By integrating Viatris’ portfolio, BBL will have one of the broadest and deepest commercialised biosimilars portfolio in the industry:
- Comprehensive biosimilar insulins portfolio, including rh-Insulin, bGlargine and bAspart;
- A growing biosimilar oncology portfolio, including bTrastuzumab, bBevacizumab, bPegfilgrastim;
- A significant presence in autoimmune segment through in-licensed products like bAdalimumab, bEtanercept.
Viatris will receive cash consideration of USD 2 billion on closing of the transaction and up to USD 335 million as additional payments expected to be paid in 2024. Additionally, upon closing of the transaction, BBL will issue USD 1 billion of Compulsorily Convertible Preference Shares (CCPS) to Viatris, equivalent to an equity stake of at least 12.9% in the Company, on a fully diluted basis.
The transaction is expected to close in 2H-2022, subject to satisfaction of closing conditions (including certain regulatory approvals). The companies will also enter into a Transition Services Agreement, pursuant to which Viatris will provide certain transition services, including commercialization services, for an expected two-year period. Viatris also will pay USD 50 million to BBL to fund certain capital expenditures.
- Viatris’ global commercial infrastructure in developed and emerging markets
- Viatris’ global biosimilars business with an estimated revenue of USD 875 million and EBITDA of USD 200 million for CY 2022 and estimated to exceed USD 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 bAflibercept
- Transition services for an expected two-year period to ensure a seamless transition with partners and continued services to patients and customers
The cash payment of USD 2 billion to be funded by ~USD 800 million raised through equity infusion in BBL and the remainder to be funded by debt, additional equity or a combination thereof.
BBL has received expressions of interest from financial institutions for debt financing and equity commitments from existing shareholders.
Kiran Mazumdar-Shaw will continue as the Executive Chairperson of BBL. Viatris will designate Rajiv Malik, President of Viatris, to serve on the BBL Board.
We see minimal overlap of roles in the two organizations due to the complementary nature of our teams thereby facilitating seamless integration of the two businesses.
Allegro Capital served as the financial advisor to BBL. Goodwin Procter and Shardul Amarchand Mangaldas served as BBL’s legal advisors to this transaction.
About Biocon Biologics Ltd.
Biocon Biologics Ltd., a subsidiary of Biocon Ltd., is a fully integrated global biosimilars organization. It is leveraging cutting-edge science, innovative tech platforms and advanced research & development capabilities to lower costs of biologics therapies while improving healthcare outcomes. It has a strong research pipeline of biosimilar molecules across diabetes, oncology, immunology and other non-communicable diseases. Five molecules from Biocon Biologics’ portfolio have been taken from lab to market in developed markets like U.S., EU, Australia, Canada, Japan and key emerging markets. It has many firsts to its credit including the most recent U.S. FDA approval of the world’s first interchangeable biosimilar, awarded to its Insulin Glargine, which has been commercialized gin the U.S. in 2021. Biocon Biologics has a strategic alliance with Serum Institute Life Sciences to address the inequitable access to life saving vaccines and biologics globally. With a team of ~4,800 people, Biocon Biologics is committed to transforming healthcare and transforming lives by enabling affordable access to millions of patients’ worldwide.
For more information, visit www.bioconbiologics.com
About Biocon Limited
Biocon Limited, publicly listed in 2004, (BSE code: 532523, NSE Id: BIOCON, ISIN Id: INE376G01013) is an innovation-led global biopharmaceuticals company committed to enhance affordable access to complex therapies for chronic conditions like diabetes, cancer and autoimmune. It has developed and commercialized novel biologics, biosimilars, and complex small molecule APIs in India and several key global markets as well as Generic Formulations in the US and Europe. It also has a pipeline of promising novel assets in immunotherapy under development.
For more information, visit www.biocon.com
Source: Biocon Biologics Limited