Biocon Biologicals’ IPO only after integrating Viatris: CEO

The company is also looking to secure US regulatory approval for Aspart (insulin biosimilar) and Bevacizumab (cancer biosimilar) before going ahead with its initial public offering, he added.

Biocon Biologics had acquired Viatris’ global biosimilar portfolio for $3.34 billion in November 2022 in a cash and equity transaction. Biocon had paid $2 billion in cash, including a $1.2 billion sustainability loan. It had also issued compulsorily convertible preference shares (CCPS) to Viatris worth around $1 billion.

Now, it is in the process of fully integrating this business with itself by taking control of Viatris’ operations. Currently, the Viatris management continues to runs parts of the business, according to the terms of agreement.

Biocon Biologics has accelerated the process of integration, and is looking to integrate the Viatris portfolio within a year compared to the earlier guidance of two years, he said.

The company has achieved integration milestones for the US as well as emerging markets for Viatris, and expects to complete the integration in Europea by the third quarter, and the rest by the end of FY24, Tambe said.

“Once we’ve got control, we’re also looking at a few other triggers to make sure that the business is on the right track to get the right valuations before we can talk about an IPO," he said.

The triggers include delayed approvals for biosimilar (insulin) Aspart and biosimilar (oncolology) Bevacizumab.

On 6 October, it had received a complete response letter (CRL) from the US FDA rejecting its application for its insulin, Aspart. It is now working on getting the approval. “It is a sizable market with no other biosimilar in play," Tambe said on the potential upside the company expects from sales of Aspart.

The US Food and Drug Administration (FDA) had also denied approval for its bevacizumab in February.

On Friday, parent Biocon reported a profit after tax of ₹172.7 crore for the September quarter compared to ₹81.8 crore a year ago. Its revenue increased by 49.2% from a year earlier to ₹3462.3 crore. Of this, Biocon Biologics reported revenue of ₹1,969 crore, rising by 97% from ₹997 crore in Q2FY23, following the Viatris deal.

Tambe said the company could post nearly 100% revenue growth due to the Viatris business and had also been able to generate robust growth for its core businesses of oncology and diabetes, across advanced and emerging markets.

The company had earlier notified that it is likely to sell additional equity soon to pare down debt. Tambe did not specify a timeline or the quantum, but said that “discussions were active".

“We will be looking at paring down debt with equity infusion, and we do have active interest in conversations for that. We will talk about that as these discussions mature," Tambe added.

At a consolidated level, Biocon’s net debt was at $1.25 billion, excluding structured investments, the company had said in July.

Meanwhile, the company received an approval from the UK regulator for Yesafili, the company’s biosimilar drug for macular degeneration.