Biocon is in talks with private investors to raise money by diluting stake in its subsidiary Biocon Biologics to reduce debt, which had been accumulated to fund its $3.3 billion acquisition of Viatris Inc’s biosimilar business, a top executive told ET.
“There are several other discussions that we have been having with private equity investors who are interested in making an investment in Biocon Biologics and that will help us bring down the $1.2 billion debt … help us reduce the interest component that we see in the P&L,” Shreehas Tambe, chief executive officer and managing director of Biocon Biologics, said in an interview.
As part of the Viatris deal, Biocon made an upfront cash payment of $2 billion to Viatris. This included $1.2 billion in debt and $800 million through an equity infusion, of which $650 million came from Biocon and $150 million from the Serum Institute Life Sciences (SILS) into Biocon Biologics.
Biocon had raised $420 million of mezzanine financing to part-finance the $650 million.
Biocon has already initiated several measures to reduce the mezzanine debt financing.
The company has entered into an agreement with Kotak Strategic Situations Fund for structured funding of up to ‘1,200 crore.
Currently, Biocon has $1.5 billion in debt through Viatris’ biosimilars acquisition, and plans to bring it down to below $1 billion.Tambe said Biocon Biologics has drawn up a comprehensive plan to integrate the acquired Viatris business and migration of business operations has been scheduled in a phased manner to ensure business continuity.
“We believe that there is a lot more to do in terms of improving market shares in the US and Europe, we’ve so far focused only on Germany and France with Adalimumab; there are seven products approved in Europe today and only three in the US. So, US will see big new product approvals, but… we are looking to see how we can maximize the efforts to generate more market shares and revenues out of that (Europe) region,” Tambe said
Biocon Biologics is on track to achieve $1 billion in revenue in calendar year 2023 without inclusion of new products, he added.
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