Viatris will receive cash up to $2.335 billion and Compulsorily Convertible Preference Shares (CCPS) in BBL valued at $1 billion.
The board of Biocon Biologics Limited (BBL), a subsidiary of biopharmaceutical company Biocon Limited has approved the acquisition of biosimilar assets of Viatris Inc by paying $3.35 billion in stock and cash, the company notified in a regulatory filing on Monday.
Following this development, Biocon shares fell as much as 8 per cent to hit an intraday low of Rs 362.
The development comes a day after the board of the company held a meeting in this regard. With the acquisition, Viatris will receive cash up to $2.335 billion and Compulsorily Convertible Preference Shares (CCPS) in BBL 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. 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 per cent in the Company, on a fully diluted basis,” the company said.
“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 $50 million to BBL to fund certain capital expenditures,” it added.
With the deal, Biocon Biologics will acquire Viatris’ global commercial infrastructure in developed emerging markets and the company’s global biosimilars business with an estimated revenue of $875 million and EBITDA of $200 million for CY 2022. The revenue of Viatris' biosimilar business is estimated to exceed $1 billion in revenue next year, according to the regulatory filing.
Kiran Mazumdar-Shaw, Executive Chairperson, Biocon Biologics said, “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.”
Biocon Biologics Ltd leverages cutting-edge science, innovative tech platforms and advanced research and development capabilities to lower the costs of biologics therapies while improving healthcare outcomes.