Local investors were not impressed, and Biocon’s share price fell 11% on the day the general market was up. But Mazumdar-Shaw described the acquisition as a “huge milestone for us”, “extremely transformative for Biocon” and “a big day for India”. Biocon Biologics, she said, is trying to build the world’s largest biosimilar portfolio, and the acquisition makes it “future-ready.”
The acquisition, he said, fills Biocon’s gaps in global supply chain, commercialization and regulatory matters. “It jumps us into developed markets. Otherwise we would have needed a lot of knowledge building,” she said. Of the $3 billion, $2 billion in cash, $1 billion in equity and $335 million to be paid out in 2024 Will be done for another biosimilar to that of Viatris.
Asked about market concerns about how Biocon will complete the deal, Mazumdar Shaw said the company has already received commitments of $800 million in equity and $1,800 million in debt. An IPO is also planned in 18-24 months. The business, he said, would generate the cash needed to repay the loan, and the payoff on acquisition would be due in 5 years.
He said that the price of Biocon Biologics was $4. 9 billion last year, when Serum Institute Life Sciences took a 15% stake in the company. With Viatris’s biosimilar business, the valuation is closer to $8 billion, he said. Biocon Biologics has investors including Tata Capital, PE firm True North and Goldman Sachs among others.
“The biosimilar business is massively valued around the world. Biocon is now in that league,” Mazumdar-Shaw said. Biosimilars are biologic drugs developed to be highly similar and clinically equivalent to an existing biologic drug. are developed, and they can be developed after the original drug’s patent has expired.