Biocon Biologics is a unique, fully integrated, global biosimilars company. It has commercialized eight biosimilars in key emerging markets and advanced markets like U.S., EU, Australia, Canada, Japan. The company has a pipeline of 20 biosimilar assets across diabetology, oncology, immunology, and other non-communicable diseases.

In February this year, Biocon Biologics (BBL) had entered into a definitive agreement with its partner Viatris Inc. to acquire the latter's biosimilars business.

On closing of this transaction, Viatris would receive cash consideration of $2 billion and additional payments aggregating up to $335 million were expected to be paid in 2024. Additionally, upon closing of the transaction, BBL would issue $1 billion of compulsorily convertible preference shares (CCPS) to Viatris, equivalent to an equity stake of at least 12.9% in the company, on a fully diluted basis.

In an exchange filing made today, Biocon informed that Biocon Biologics and Viatris have obtained all applicable approvals from key global regulators including the U.S. Federal Trade Commission, the Competition Commission of India and the Reserve Bank of India, and its investors.

"Effective from the date of closing, Biocon Biologics will recognize the combined revenue and associated profits from the acquired products, a step-up from the existing profit share arrangement,” the company said in a statement.

The acquisition provides Biocon Biologics with direct commercial capabilities and supporting infrastructure in the advanced markets and several emerging markets, bringing it closer to patients, customers, and payors.

Kiran Mazumdar-Shaw, executive chairperson, Biocon Biologics, said: “The completion of the acquisition of Viatris' global biosimilars business is a historic inflection point in Biocon Biologics' journey of becoming a world leading, fully integrated biosimilars enterprise, committed to serve patients' needs for affordable access to essential biomedicines.

It will fast-track our direct entry into several advanced and emerging markets. This acquisition builds on our decade-long partnership and will enable us to realize our vision of addressing global health inequities. I believe this move will strengthen our value proposition to deliver long-term value to Biocon and Biocon Biologics

shareholders.

To ensure seamless continuity of services to patients and customers, Viatris will continue to work with our teams for a transition period of up to two years. I would like to thank the teams at both Biocon Biologics and Viatris that have worked together to address regulatory and statutory requirements to enable deal closure.”

As a part of completing the transaction, Biocon Biologics has issued compulsorily convertible preference shares (CCPS) in the company valued at $1 billion, equivalent to an equity stake of at least 12.9% on a fully diluted basis, and made an upfront cash payment of $2 billion to Viatris.

To fund the upfront payment, Biocon Biologics has secured $1.2 billion of sustainability linked loan (SLL). The balance has been funded through an equity infusion of $650 million by Biocon and $150 million by Serum Institute Life Sciences (SILS). Biocon's funding comprises $230 million from existing reserves and $420 million through mezzanine financing. Biocon is in the process of securing investments to retire the mezzanine financing, post deal closure.

Post conclusion of the Viatris and Serum transactions, Biocon Limited's stake in Biocon Biologics will be 68%.

Rajiv Malik, president of Viatris, has joined the board of directors of Biocon Biologics, effective 29 November 2022. Kiran Mazumdar-Shaw will continue as the executive chairperson of Biocon Biologics.

Biocon is an innovation-led, global biopharmaceutical company committed to enhancing affordable access to complex therapies for chronic conditions like diabetes, cancer and autoimmune diseases.

The company had reported a net profit (before exceptional items) of Rs 168 crore in Q2 FY23, down by 10% from Rs 188 crore in Q2 FY22. Revenue from operations increased by 26% YoY to Rs 2,320 crore during the quarter.

The scrip rose 0.05% to currently trade at Rs 282.25 on the BSE.