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Biocon Biologics to buy Viatris biosimilar assets for up to $3.3 bn, IPO likely in 2 years

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Biocon Biologics to buy Viatris biosimilar assets for up to $3.3 bn, IPO likely in 2 years

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Biocon Biologics said Viatris will receive consideration of up to $3.335 billion, including cash up to $2.335 billion and compulsorily convertible preference shares (CCPS).

Biocon subsidiary Biocon Biologics' has entered into a definitive agreement with Viatris to acquire the US-based company's biosimilars business. The deal is worth up to $3.335 billion in stock and cash, said the Biocon arm, which aims to create a unique fully integrated global biosimilars enterprise.

The pharmaceutical firm said it was ready to advance the bio-similar journey to the next level and an initial public offering of Biocon Biologics is expected within two years. "IPO will be at very attractive levels," the company said.
On Viatris, the company said the acquisition of the biosimilar business will make Biocon Biologics a unique global vertical leader and that Biocon will have the deepest biosimilar business in the industry.
Under the deal, subject to regulatory and other approvals, Viatris will receive $3.335 billion, including cash up to $2.335 billion and compulsorily convertible preference shares (CCPS) valued at $1 billion. Viatris will receive cash consideration of $2 billion on the closing of the transaction and up to $335 million as additional payments expected to be paid in 2024, it said.
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After the closure of the deal, Biocon Biologics will realise the full revenue and associated profits from its partnered products, a step-up from its existing arrangement with Viatris, it said.
"The deal will expand Biocon Biologics’ EBITDA (earnings before interest, taxes, depreciation) base and strengthen its overall financials, enabling investments for sustained long-term growth," it added.
As part of the agreement, Biocon Biologics will have a comprehensive portfolio comprising its current range of commercialised insulins, oncology and immunology biosimilars as well as several other biosimilar assets currently under development. Biocon Biologics also has access to the vaccines
portfolio through its previously announced partnership with Serum Institute Life Sciences (SILS), according to the statement.
“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," said Kiran Mazumdar-Shaw, Executive Chairperson of Biocon Biologics.
"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,"  she added.
The transaction is expected to close in the second half of 2022 subject to satisfaction of closing conditions including regulatory approvals, according to Biocon.
“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," said Robert J Coury, Executive Chairman at Viatris.
Currently, Biocon Biologics has a portfolio of 20 biosimilars, and the acquisition significantly strengthens its position in providing affordable access to patients through its portfolio in diabetes, oncology, immunology and other noncommunicable diseases.
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