Biocon Biologics Limited (BBL), a subsidiary of Indian biopharma company Biocon, has agreed to acquire the biosimilars business of Viatris, a US-based pharma company, in a deal worth up to $3.33 billion in a move to create a fully integrated global biosimilars enterprise.

The consideration includes cash of up to $2.33 billion and $1 billion worth compulsorily convertible preference shares (CCPS) in Biocon Biologics.

Viatris’ global biosimilars business involved in the deal is estimated to have revenues of $1 billion in 2023. The American pharma company has nearly 150 marketing authorizations for its biosimilars, which are sold in more than 85 countries.

The deal with Biocon Biologics is the result of a strategic review undertaken by Viatris. It has been announced by Viatris alongside its Q4 and full year 2021 financial results.

Michael Goettler — CEO of Viatris said: “As promised, while delivering strong financial performance in our first year, we spent 2021 conducting a comprehensive strategic review of our entire business.

“Through that process, we have identified opportunities that we believe will generate up to approximately $9 billion in pre-tax proceeds, through the Biocon Biologics transaction and the divestment of assets that are non-core to our future.

“We believe that unlocking this value will give us significant financial flexibility to further reshape the Company, simplifying and optimizing our business, building a more durable higher-margin portfolio focused on three key therapeutic areas—ophthalmology, gastrointestinal, dermatology—and maximizing total shareholder return.”

Following the closing of the deal, Biocon Biologics is expected to have a comprehensive portfolio that includes its current line-up of commercialized insulins, immunology, and oncology biosimilars along with various other biosimilar assets that are presently under development.

Currently, Biocon Biologics has a portfolio of 20 biosimilars and the acquisition of Viatris’ biosimilar assets are expected to considerably bolster its position in giving affordable access to patients through its portfolio in diabetes, immunology, oncology, and other non-communicable diseases.

Biocon Biologics will also have access to the vaccines portfolio via its previously announced partnership with Serum Institute Life Sciences (SILS).

Dr Arun Chandavarkar — Biocon Biologics Managing Director said: “This deal provides several advantages, including strategic agility and operational efficiencies, which will help us mitigate pricing pressures in a competitive global biosimilars landscape.

“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.”

Upon closing of the deal, Viatris will be paid $3 billion in consideration made up of a cash payment of $2 billion and $1 billion of convertible preferred equity. The American pharma company will also get additional cash payments of up to $335 million that are likely to be paid in 2024.

Viatris will gain a stake of at least 12.9% in Biocon Biologics.

The deal, which is subject to regulatory approvals and other conditions, is expected to close in the latter half of this year.

  Biocon, Biocon Biologics, Dr Arun Chandavarkar, India, Michael Goettler, USA, Viatris