Biocon Biologics Ltd. (BBL) has entered into a definitive agreement to acquire its partner Viatris Inc.’s global biosimilars business to create a unique, fully integrated, world leading biosimilars enterprise.

This transformational deal 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.

Our long-standing global partnership with Viatris has enabled us to achieve many firsts, setting new benchmarks for the global biosimilars industry. The complementary investments made by Biocon Biologics and Viatris in R&D, manufacturing, and commercialization, ahead of its peers, have allowed us to develop strong know-how in each of these verticals.

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.

BBL to Acquire a Financially Strong Biosimilars Business

As part of this deal, we are acquiring Viatris’ global biosimilars business, estimated to be USD 1 billion in revenue next year.

Post closure of the deal, Biocon Biologics will realize the full revenue and associated profits from its products partnered with Viatris, which is a step-up from the existing arrangement of realizing a smaller fraction of the economic benefits.

The deal will thus expand BBL’s EBITDA base and strengthen overall financials, enabling us to invest in sustained long-term growth.

Biocon Biologics: To be A Fully Integrated Biosimilars Enterprise

We have consistently focused on the importance of vertical integration in the biosimilars industry to be agile and competitive. Thus far, we relied on the complementary capabilities of Viatris and BBL to provide vertical integration.

Going ahead, we believe a fully integrated model will become increasingly important for companies to drive sustainable growth as the global biosimilars industry matures. The operational efficiencies will help us mitigate pricing pressures in a competitive global biosimilars landscape.

Acquisition Brings Together Complementary Capabilities and Strengths

In our over decade long Biocon’s collaboration with Viatris, we have contributed our R&D and manufacturing strengths while relying on Viatris’ strong commercialization capabilities to achieve business success.

This acquisition now enables BBL to be a standalone vertically integrated organisation and fills the gaps in our missing capabilities in developed markets, especially around supply chain and commercialisation.

By bringing together the complementary capabilities and strengths of both partners, it makes us future-ready for the next wave of our products under development.

Acquired Biosimilars Business to Add Financial Depth and Commercial Capabilities

This deal provides several advantages:

• Strengthens our financial profile, allowing us to make continued investments in R&D, expand global-scale manufacturing capacity & capability, widen geographical reach;
• Realise commercial, regulatory and IP capabilities, in developed markets; as well as operational efficiencies;
• Assemble a comprehensive portfolio comprising our current range of commercialized insulins, oncology and immunology biosimilars, as well as several other biosimilar assets currently under development.

Full Ownership of Partnered Biosimilars Portfolio, Including In-licensed Assets

BBL’s full ownership of our partnered biosimilars portfolio, including in-licensed assets, will create one of the broadest and deepest biosimilars pipelines in the industry with a:

• 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 products in-licensed by Viatris, like bAdalimumab, bEtanercept.
• An additional value add comes from bAflibacept on which we have an option and a payment obligation by FY25.

BBL’s Comprehensive Product Portfolio Will Provide Global Scale & Fuel Future Growth

The deal will create a comprehensive product portfolio.

Biocon Biologics’ current portfolio of 20 biosimilars includes biosimilar assets partnered with Viatris, as well as several other assets being developed independently.

This acquisition will provide significant potential for growth in diabetes, oncology, immunology and other non-communicable diseases. It will also prepare us for greater success with the commercialization of our future pipeline.

Expand Geographic Reach; Accelerate Build out of Commercial Capability in Developed Markets

This transaction will enhance our geographical reach.

Combining Viatris’ biosimilars business with BBL accelerates the build out of our commercial capability in developed markets to become a strong global brand with a direct presence in U.S., Europe, Canada, Japan, Australia and New Zealand.

Viatris Will Receive up to USD 3.335 billion in Cash & Stock

Viatris will receive up to USD 3.335 billion in cash & stock. The break-up of the consideration is as follows:

• Viatris will receive cash consideration of $2 billion on closing of the transaction.
• Upon closing of the transaction, BBL will issue $1 billion of Compulsorily Convertible Preference Shares to Viatris, equivalent to a fully diluted equity stake of at least 12.9% with a cap to the total number of shares being issued.
• There is additional deferred consideration of $335 million due in FY25 of which $175m is linked to the option to acquire biosimilar Aflibercept.
• Viatris will designate Rajiv Malik to serve on the BBL Board.

Building an Organization for The Future

We are confident that this deal will make us future-ready and drive immense value for our shareholders and patients globally as:

• We create one of the world’s leading fully integrated biosimilar companies, taking our products from lab to market globally;
• Strengthen our commercial presence in both developed and emerging markets;
• Build a comprehensive portfolio of biosimilars and vaccines;
• Continue to expand our large-scale biologics manufacturing with end-to-end capabilities;
• Build the organization of the future under the stewardship of a highly experienced management team with strong execution capabilities;
• Enable continued investments for long-term growth on the back of robust financials.

Read the Press Release: Biocon Biologics to Acquire Viatris’ Biosimilars Assets for up to USD 3.335 billion in Stock and Cash

Download the PPT: Creating a Unique Global, Vertically Integrated Biosimilars Leader