Viatris Completes Biosimilars Transaction with Biocon Biologics

 Receives a $2 Billion Cash Payment and $1 Billion of Convertible Preferred Equity Representing a Stake of at Least 12.9% (on a Fully Diluted Basis) in Biocon Biologics

Marks the First in a Series of Expected Initiatives to Reshape and Rebase Viatris, Aimed at Setting it Up for Long-term Growth

Viatris Inc. (NASDAQ: VTRS) today announced that it has closed its transaction with Biocon Biologics Limited ("Biocon Biologics"), creating what Viatris expects to be a unique fully vertically integrated global biosimilars leader. Viatris and Biocon Biologics have entered a Transition Services Agreement (TSA) pursuant to which Viatris will provide commercialization and certain other transition services for an expected two-year period intended to ensure business continuity for patients, customers and colleagues. Upon the completion of the transition services, Biocon Biologics will assume responsibility of commercial, regulatory and other related services.

Under the terms of the transaction agreement, Viatris received $3 billion in consideration in the form of a $2 billion cash payment and $1 billion of convertible preferred equity representing a stake of at least 12.9 % (on a fully diluted basis) in Biocon Biologics. Viatris also is entitled to $335 million of additional cash payments in 2024.

Financial Impact of Completion of the Biosimilars Transaction 
As previously stated, the Company's financial guidance ranges for total revenues, adjusted EBITDA and free cash flows for the year ending December 31, 2022, do not include the impact of the closing of the transaction with Biocon Biologics.  The Company expects its reported results for the year ending December 31, 2022, to be impacted by the closing of the transaction as follows:

• The Company expects its reported total revenues and adjusted EBITDA for the year to be lower by approximately $80 million and $20 million, respectively.

• The Company expects to report the $2 billion of cash proceeds, offset by the impact of certain deal related adjustments, as cash flows from investing activities. Additionally, the Company expects to incur approximately $400 million of certain deal related expenses, primarily taxes and associated transactions costs. As a result, the Company expects these deal related expenses to lead to lower reported cash flows from operating activities, and consequently free cash flow, for the year.

Capital Allocation 
The Company expects to use the net divestiture cash from the biosimilars transaction to:

• Pay down additional short-term debt and accelerate its progress towards $6.5 billion of Phase 1 debt reduction

• And, in combination with cash on hand, to:

• 
  

• Fund the previously announced ophthalmology acquisitions totaling approximately $700 to $750 million, anticipated to close in the first quarter of 2023, and
  Begin to execute on the previously announced share buyback authorization in 2023.

  https://finance.yahoo.com/news/viatris-completes-biosimilars-transaction-biocon-130000791.html