Biocon's arm to acquire Viatris’ biosimilars for $3.3 billion

Leading pharma player Biocon's arm Biocon Biologics said it will acquire the biosimilars business of Viatris Inc for $3.335 billion, which comprises cash worth $2.335 billion and preference shares.

In December, Moneycontrol was the first to report of this impending deal much ahead of everyone else.

Biocon Biologics will issue $1 billion of compulsorily convertible preference shares (CCPS) to Viatris, which translates to equity stake of at least 12.9% in the company, on a fully diluted basis.

In a press release, Kiran Mazumdar-Shaw, executive chairperson of Biocon Biologics, said, "This acquisition is transformational and will create a unique fully integrated, world leading biosimilars enterprise." She added, "The deal will enable Biocon Biologics 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."

Kiran Mazumdar-Shaw will continue to be executive chairperson of Biocon Biologics, while Viatris has designated president Rajiv Malik to also serve on Biocon Biologics board.

By integrating Viatris’ portfolio, Biocon Biologics will have one of the broadest commercialised biosimilars portfolios in the business. Biocon Biologics is expected to gain from Viatris’ biosimilars business, whose revenues is estimated to be $1 billion next year. The move is expected to scale up Biocon's biosimilar business and unlock shareholder value.

Viatris’ executive chairman Robert J Coury said, "Our unique collaboration with Biocon began more than a decade ago, even before a biosimilars pathway was defined in most countries." He added, "This transaction will allow Viatris to continue to participate in the global biosimilars space in a more optimised way, while also allowing us to accelerate our own financial priorities."

Financial rationale

After closure, Biocon Biologics will realise the full revenue and associated profits from its partnered products. That is a step-up from its existing arrangement with Viatris. Mylan is now part of a new global healthcare company Viatris, which was formed with the merger of Mylan and the Upjohn division of Pfizer Inc.