Biocon Seeks To List Biocon Biologics Ltd. By December 2023
Biocon seeks to raise funds over the next one year from its stake in Biocon Biologics to de-leverage balance sheet.
Bengaluru-based Biocon plans to list its biosimilar arm, Biocon Biologics, by December 2023, said Managing Director and Chief Executive Officer at Biocon Ltd., Siddharth Mittal, during an earnings interview with BQ Prime.
Biocon has concluded financing for the acquisition of biosimilar assets from Viatris for $3.33 billion. "The transaction is expected to be concluded by the end of the third quarter," said Mittal.
Biocon will issue $1 billion worth of cumulative convertible preference shares in Biocon Biologics to Viatris to fund the acquisition of Viatris' assets. Biocon will also fund the $2 billion upfront cash payment through $1.2 billion in debt raised on the books of Biocon Biologics, $150 million in equity raised from the Serum Institute, and $650 million from Biocon. Biocon will use reserves worth $230 million and raise mezzanine debt worth $420 million on its books.
Furthermore, the stake in Syngene is an option with Biocon, said Mittal, adding that it will continue to maintain a majority stake in the company. In September, the parent company sold a 5.4% stake in Syngene to raise over Rs 1,200 crore in funds to finance the Viatris deal.
Biocon plans to repay the mezzanine debt before the close of the fiscal in March 2023, said Mittal. The parent is in talks with a prospective private equity player for a stake sale in Biocon and Biocon Biologics, said Mittal.
The CCPS issues to Viatris are to be converted into shares ahead of the initial public issue of Biocon Biologics, which is currently planned for the end of 2023, depending on market conditions.
The quarter saw Biocon increase its research and development spending for molecules going into clinical trials. According to Mittal, over the longer term, R&D spending is expected to be in the range of 12–15%.
Watch the full interview here: