Biocon’s arm buys US company’s assets for $3.3 billion

BENGALURU: Kiran Mazumdar-Shaw has made one in every of her boldest strikes, buying a enterprise that’s concerning the dimension of her personal firm for $3. 3 billion. Biocon Biologics, a subsidiary of MazumdarShaw’s Biocon, is buying the biosimilar property of USbased Viatris (previously Mylan). Viatris’s annual biosimilar income is about $1 billion, about the identical as Biocon’s total income.
Native traders weren’t impressed, and Biocon’s share worth crashed by 11% on a day when the final market was up. However Mazumdar-Shaw described the acquisition as a “enormous milestone for us”, “extraordinarily transformational for Biocon” and “a giant day for India”. Biocon Biologics, she mentioned, is attempting to create the world’s largest biosimilars portfolio, and the acquisition makes it “future-ready.”

The acquisition, she mentioned, fills Biocon’s gaps in international provide chain, commercialisation, and regulatory issues. “It leapfrogs us into developed markets. We’d in any other case have wanted lots of data constructing,” she mentioned. Of the $3. 3 billion, $2 billion will probably be paid in money, $1 billion in fairness, and one other $335 million will probably be paid in 2024 for an additional biosimilar that Viatris will then have.
Requested about market worries on how Biocon would fund the deal, MazumdarShaw mentioned the corporate has already acquired commitments of $800 million in equi- ty and $1,800 million in debt. An IPO can also be deliberate in 18-24 months. The enterprise, she mentioned, will generate the money wanted to service the debt, and the payback on the acquisition would occur in 5 years.
Biocon Biologics, she famous, was valued at $4. 9 billion final 12 months, when Serum Institute Life Sciences took a 15% stake within the firm. With Viatris’s biosimilar enterprise, the valuation is near $8 billion, she mentioned. Biocon Biologics has a number of different traders, together with Tata Capital, PE agency True North, and Goldman Sachs.
“The biosimilar enterprise is valued richly all over the world. Biocon is now in that league,” Mazumdar-Shaw mentioned. Biosimilars are organic medication which can be developed to be extremely comparable and clinically equal to an current organic drug, and they are often developed as soon as the unique drug’s patent expires.