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Viatris sells biosimilar assets to Biocon Biologics

Viatris intends to continue to participate in the global biosimilars market through its ownership position in Biocon Biologics.  

Viatris has reached a definitive agreement to sell its biosimilars portfolio to Biocon Biologics

The company said that it intends to continue to invest in expanding its commercial and scientific capabilities in key focus areas for the future while continuing to participate in the global biosimilars market through its ownership position in Biocon Biologics.  

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“The board of directors has worked closely and strategically with the management team to develop a future direction for Viatris that will not only unlock immediate value but will also create a simpler, stronger and more focused company,” Viatris executive chairman Robert Coury said. “The board is extremely pleased with the initiatives being announced, which are consistent with our strategy of returning value to shareholders.”

In addition, Viatris will contribute to Biocon Biologics its biosimilars portfolio and related commercial and operational capabilities, amounting to 2022 estimated revenue of approximately $875 million.

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“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,” Viatris CEO Michael Goettler said.

“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 and dermatology — and maximizing total shareholder return,” Goettler said.

The sale is expected to close in the second half of 2022, at which time Viatris will receive $3 billion in consideration in the form of a $2 billion cash payment and $1 billion of convertible preferred equity. The company also said it will receive up to $335 million as additional cash payments that are expected to be paid in 2024.

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“Our successful collaboration with Biocon Limited, the majority shareholder of Biocon Biologics, began more than a decade ago and has a shared history of many accomplishments. This transaction is the right natural next step for our partnership,” Viatris president Rajiv Malik said.

“Creating what we expect to be a unique vertically integrated global biosimilars leader is a continuation of our biosimilars journey and enables us to participate in this space in a more optimized way while unlocking substantial trapped value. We believe we are well positioned to leverage the proceeds generated by the transaction with Biocon Biologics to increase our future R&D investments,” Malik said. “We are excited to continue our journey of moving up the value chain and leveraging our capabilities to focus on more complex and novel products. We believe that our robust R&D engine and scientific capabilities combined with our proven results in delivering on our pipeline strongly positions us to bring medicines that target gaps in health care to patients around the world.”

Viatris will own a stake of at least 12.9% of Biocon Biologics, on a fully diluted basis, as well as have certain priority rights with respect to certain liquidity events.

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“Delivering on our financial commitments, further strengthening our balance sheet and continuing to focus on cash flow generation will serve to enhance our financial flexibility as we reshape our company for the future,” Viatris CFO Sanjeev Narula said.

“Our strong 2021 financial and operational performance provides a firm foundation from which to build upon and sets us up for a solid start in 2022. We believe that executing on our recently announced initiatives will not only unlock value and provide additional access to capital but will also accelerate our phase I financial commitments, increase our investments into the business, while returning additional capital to our shareholders, including our announced board authorization of a share repurchase program,” Narula said.

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