Biocon fully integrates Biocon Biologics in $5.5 billion deal

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By Rishabh Jaiswal and Rishika Sadam

BENGALURU, Dec 6 (Reuters) – Indian biopharmaceutical company Biocon said on Saturday it would fully integrate its biosimilar unit Biocon Biologics as a wholly owned subsidiary, consolidating Biocon’s biosimilars and generics businesses under one roof.

Biocon said it will acquire the remaining stakes in Biocon Biologics from Serum Institute Life Sciences, Tata Capital Growth Fund II and Activ Pine LLP through a share swap of 70.28 Biocon shares for every 100 Biocon Biologics shares, at a price of 405.78 Indian rupees ($4.51) per Biocon share. The deal values Biocon Biologics at $5.5 billion.

Biocon Biologics Chief Executive Shreehas Tambe will be CEO and managing director of the combined entity, and Kedar Upadhye will be the chief financial officer, Biocon said in a press release. Biocon CEO Siddharth Mittal will transition to a group leadership role. 

The integration is expected to be completed by March 31.

Bengaluru-based Biocon said it reviewed several options for Biocon Biologics, including an IPO and a merger, before deciding that an integration through the purchase of minority stakes “offers the most efficient and value-accretive path forward”.

Tambe told Reuters in January that Biocon might list its key biosimilars business by March 2026 and aimed for a double-digit share in its core U.S. market for its new launches.

Biosimilars are similar and relatively affordable versions of high-priced and complex biologics drugs used to treat illnesses such as cancer and autoimmune diseases. 

Biocon, which had earlier been pushing its IPO plans, has been waiting to complete the integration of its acquired biosimilars firm Viatris and refinance debt.

The company said on Saturday it would also buy the residual stake held by Viatris for $815 million, out of which $400 million will be payable in cash and $415 million in a share swap.

The company also approved raising additional capital of up to 45 billion Indian rupees ($500 million) through a Qualified Institutional Placement, with proceeds going towards the cash component payable to Viatris. 

($1 = 89.9340 Indian rupees)

(Reporting by Rishabh Jaiswal in Bengaluru and Rishika Sadam in Hyderabad; Editing by William Mallard and Tom Hogue)