The recently-approved Biocon-Biologics merger deal will unlock growth opportunities and create value for the company's shareholders, according to Kiran Mazumdar-Shaw, Chairperson and Managing Director of India's largest biopharmaceutical company. With the deal, the Bengaluru-based Biocon Ltd will likely become a unified global biopharma leader.
Earlier this month, Biocon approved raising Rs 4,500 crore via Qualified Institutional Placement in one or more tranches and a Rs 6,950 crore preferential share issue to acquire stakes in Biocon Biologics, from existing investors.
''In terms of our biosimilars business as well as the existing GLPs-1 opportunities ahead, we felt that by combining the two businesses, we would unlock a lot of shareholder value for Biocon as a conglomerate," said Shaw in an exclusive interaction with NDTV Profit on Dec. 23. Shaw added that Hulio as an asset is now under full control of Biocon Ltd.
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On the Biocon-Biologics deal Shaw said, "We believe this creates a much more diversified entity and a simpler elegant model, which helps us to focus on leveraging the opportunity that we have of being uniquely positioned to combine both insulin biosimilars and generic GLP-1s."
According to Shaw, the full integration between Biocon and its subsidiary is a ''big opportunity'' that will drive growth for the conglomerate and also benefit all stakeholders. With this, Biocon will become a unified entity by combining biosimilars and generics in more than 120 countries.
The preferential issue will involve 17.12 crore equity shares of Biocon at a price determined under SEBI norms, aggregating up to Rs 6,950 crore, for consideration other than cash through a swap of Biocon Biologics Ltd securities. The shares will be allotted to selling shareholders including Mylan Inc., Serum Institute Life Sciences, Tata Capital Growth Fund II, and Activ Pine LLP, subject to shareholder and regulatory approvals.
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Upon securing the global manufacturing and commercial rights for Hulio, Shaw believes that Hulio is an asset where Biocon has a transfer pricing and profit sharing arrangement. "When we got the whole business (full integration of Biocon and Biocon biologics), we believe it was important for the biosimilars business to be capturing the entire value," she said.
"From that pint of view, this is a big deal and it now brings the asset under our full control. We believe we can get higher margins by doing this and unlock significant growth opportunities by having cost efficiency and the kind of opportunities ahead in terms of adalimumab," explained Shaw.
Hulio is a biosimilar drug (adalimumab-fkjp) for autoimmune diseases, and is one of the key assets of the Biocon Biologics. It is a biosimilar of the reference product adalimumab, used to treat autoimmune diseases such as rheumatoid arthritis and psoriasis. It is developed and commercialized by Biocon Biologics, in partnership with other companies in global markets.
So far, Hulio has received regulatory approvals and is available in some key markets, including the US and Europe. It is seen as a significant product in the Biocon Biologics' portfolio, contributing to the leading, diversified bio- pharma company's growth in the global biosimilars market.
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