biocon: Biocon plans to sell stake in Biologics to reduce debt: Shreehas Tambe, Biocon Biologics

Biocon is in talks with private investors to raise money by diluting its stake in its subsidiary Biocon Biologics to reduce debt accumulated around its $3.3 billion acquisition of the biosimilars business from Viatris Inc., a top executive told ET.

“There are several other conversations we’ve had with private equity investors interested in investing in Biocon Biologics that will help us pay off the $1.2 billion in debt…help us to reduce the interest rate component that we see in the P&L,” said Shreehas Tambe, Biocon Biologics’ chief executive officer and managing director, in an interview.

As part of the Viatris deal, Biocon made a $2 billion upfront payment to Viatris. This included $1.2 billion in debt and $800 million through a capital injection, of which $650 million came from Biocon and $150 million from Serum Institute Life Sciences (SILS) into Biocon Biologics.

Biocon had raised $420 million in mezzanine financing to help fund the $650 million.

Biocon has already initiated several measures to reduce mezzanine debt financing.

The Company has entered into an agreement with the Kotak Strategic Situations Fund for up to 1,200 crore of structured financing.

Biocon currently owes $1.5 billion in debt from the Viatris biosimilars acquisition and plans to reduce this to below $1 billion in a phased approach to ensure business continuity.

“We believe there is still work to be done to improve market share in the US and Europe. So far we have only focused on Germany and France with adalimumab; there are seven products approved in Europe today, only three in the US So the US will see big new product approvals but … we are looking at how we can maximize our efforts to generate more market share and revenue from this region (Europe),” said Tambe

Biocon Biologics is on track to reach $1 billion in calendar year 2023 sales excluding new products, he added. biocon: Biocon plans to sell stake in Biologics to reduce debt: Shreehas Tambe, Biocon Biologics

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