With an eye on the post Covid market, Biocon has made bold moves of late, striking acquisition and partnership deals. Chairperson Kiran Mazumdar-Shaw shares with FE’s Srinath Srinivasan how the recent acquisition of Viatris’ biosimilars business will spur the company’s growth. Excerpts:

How does your acquisition of Viatris’ global biosimilars business for over $3 billion dovetail with your growth plans?

We expect the acquisition to make Biocon a fully integrated biosimilars company, setting us up for long-term business growth and allowing value creation for our shareholders. In an over decade-long collaboration with Viatris, we have pitched in with our R&D and manufacturing strengths while relying on Viatris’ strong commercialisation capabilities to achieve gains. This acquisition fills the gaps in our capabilities in developed markets, especially around the supply chain and commercialisation. We also get to realise the full profits from this business, which is estimated to have revenues of $1 billion next year. The long-standing relationship with Viatris means the business can be seamlessly integrated into ours, maximising value from the transaction.

Further, the acquisition will ready us for the next wave of products under development. The acquisition is thus value accretive for both Biocon and Biocon Biologics shareholders. It will expand BBL’s Ebitda base and strengthen its overall financials, enabling investments for sustained long-term growth.

What is the revenue target that the combined entity will be looking at in the coming years? How has the value chain recovered from the pandemic’s impact since last year?

Post the closure of the Viatris’ deal, Biocon Biologics will realise the full revenue and profits from its products, which will be a jump from the existing arrangement where we get only a fraction of the pie. We cannot provide a revenue outlook at this stage. However, there are multiple near-term catalysts, such as revenues generated from the vaccines alliance with Serum Institute and the US launch of biosimilar Bevacizumab, as part and Adalimumab in the future, which will propel our business. We also have the option to acquire Viatris’ rights to biosimilar Aflibercept, an advanced asset.

Biocon Biologics is building a comprehensive portfolio of biosimilars and vaccines with a clear growth path for the near- to medium-term. As the impact of the Covid-19 pandemic wanes, Biocon Biologics is witnessing market share gains in developed markets and strong growth in India and emerging markets.

How is the partnership with SILS shaping up?

The strategic alliance with Serum Institute Life Sciences which entails the merger of Covishield Technologies with Biocon Biologics with effect from October 1, 2022 is on track. We are submitting the relevant regulatory filings. The structure of the alliance provides us an asset-light and accelerated entry into the vaccines and antibodies space in the infectious diseases segment. The long-term supply arrangement of 100 million vaccine doses annually from Serum will grant Biocon Biologics an additional revenue stream. Initially, Biocon Biologics would be leveraging SILS’ vaccines portfolio, including Covid vaccines. In addition to Covid vaccines, there are vaccines for mosquito-borne diseases to be explored. Biocon Biologics and SILS would also jointly develop a portfolio of next-generation vaccines in due course.

We expect to start recognising revenues from the SILS partnership from the second half of FY23.

Even as you are bullish on Biosimilars, your generics business seems to have recovered, as is evident from your Q3FY22 results. What’s the news from this segment?

For Q3FY22, the generics segment delivered quarterly revenues of `607 crore, indicating sequential growth of 15% and year-on-year growth of 7%. The quarter saw a return to regular operations, which had been impacted due to Covid-related challenges in earlier quarters. The robust sequential growth came on the back of the successful US launch of our vertically integrated complex formulation, Everolimus, which also marked a Day-1 launch for its 10-mg strength.

We are also witnessing an uptick in the generic APIs business. The launch of Everolimus was a key driver of the year-on-year growth of the segment. We continue to focus on portfolio and geographical expansion, as well as strengthening our development pipeline. In FY21, the business accomplished 33 filings and received 14 approvals for APIs globally. Besides, we are expediting our capacity enhancement projects. Our greenfield Immunosuppressants API manufacturing facility project in Visakhapatnam is on track to be commissioned by FY22 end, with qualification and validation in FY23.