Biocon Biologics Ltd., (BBL) a subsidiary of Biocon Ltd., announced today (February 28) that it has entered into a definitive agreement with its partner Viatris Inc. in a cash and stock deal.
Viatris will receive cash consideration of $2 billion on closing of the transaction and up to $335 million as additional payments expected to be paid in 2024. Additionally, upon closing of the transaction, BBL will issue $1 billion of Compulsorily Convertible Preference Shares (CCPS) to Viatris, equivalent to an equity stake of at least 12.9 percent in the Company, on a fully diluted basis.
The Board of Directors of both companies have approved the transaction.
Kiran Mazumdar-Shaw, Executive Chairperson, Biocon Biologics, 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.”
“The deal will enable BBL to attain a robust commercial engine in the developed markets of US & 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.
Robert J. Coury, Viatris’ Executive Chairman said: “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.”
The transaction is expected to close in second half of 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.
Biocon Biologics will acquire Viatris’ biosimilars business to create a unique fully integrated global biosimilars enterprise.
BBL will acquire Viatris’ global commercial infrastructure in developed and emerging markets, its global biosimilars business with an estimated revenue of $875 million and EBITDA of $200 million for CY 2022 and estimated to exceed USD 1 billion in revenue next year.
It will also acquire Viatris' rights in all biosimilars assets including its in-licensed portfolio and an option to acquire Viatris’ rights in bAflibercept
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 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.
