BY Richard Summerfield
A unit of Indian drug manufacturer Biocon Ltd has agreed to acquire Viatris Inc’s biosimilars business in a deal worth $3.34bn.
Under the terms of the deal, Viatris will receive up to $2.34bn in cash, and convertible shares in the unit Biocon Biologics worth $1bn.
The deal, which is expected to close in the second half of 2022, will see the cash portion of the transaction funded through an $800m equity commitment in Biocon Biologics, with the remainder being funded through debt.
Kiran Mazumdar-Shaw will continue as the executive chairperson of Biocon Biologics. Viatris will nominate Rajiv Malik, president of Viatris, to serve on the Biocon Biologics board.
The two companies had built collaborations on multiple biosimilar products before Viatris formed from Mylan’s acquisition of Pfizer’s Upjohn established medicines business. Biocon has been responsible for research and development (R&D) and manufacturing under the terms of their old partnership, however the company is now buying Viatris’ commercial capabilities.
“By combining the biosimilars business of Viatris to create a global, vertically integrated business in BBL, we are confident of unlocking significant value for our stakeholders,” said Dr Arun Chandavarkar, managing director of Biocon Biologics. “This deal gives BBL full ownership of Viatris’ rights in biosimilars assets, enabling us to recognize combined revenues and profits. To ensure a seamless transition and continued service to patients and customers, Viatris will provide commercial and other transition services to BBL for an expected period of two years.
“This deal provides several advantages, including strategic agility and operational efficiencies, which will help us mitigate pricing pressures in a competitive global biosimilars landscape,” he continued. “We remain committed to sustainable growth with a strong financial profile, expanded geographical reach and continued investments in R&D to build a world-leading biosimilars franchise. We believe that as a fully integrated global company, we will be able to enhance patient access and reduce healthcare inequities worldwide.”
“Our unique collaboration with Biocon began more than a decade ago, even before a biosimilars pathway was defined in most countries,” said Robert J. Coury, executive chairman of Viatris. “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.”
News: India's Biocon beefs up biosimilar portfolio with $3.34 bln Viatris deal, shares fall