Biocon Biologics Board Approves $150 Million Capital Injection From Goldman Sachs In Exchange For Optionally Convertible Debentures

Kiran Mazumdar-Shaw, Executive Chairperson, Biocon
Kiran Mazumdar-Shaw, Executive Chairperson, Biocon

Biocon Ltd. on the 7th of November announced that the Board of its subsidiary Biocon Biologics Ltd (Biocon Biologics) has approved a ₹ 1,125 crore ( $ 150 million) capital injection from Goldman Sachs. According to reports, Goldman Sachs will be issued an Optionally Convertible Debentures at a post-money equity valuation of $ 3.94 billion. Currently, the deal depends on customary approvals and conditions.

Kiran Mazumdar-Shaw, Executive Chairperson, Biocon said to news agency, “We are extremely pleased to welcome a capital injection by Goldman Sachs at this inflection point of Biocon Biologics’ journey in its quest for global leadership in providing affordable access through Biosimilar drugs. This transaction is a part of the overall strategic plan of value creation for our shareholders through Biocon Biologics.”

The same news agency also reported comments of Dr. Christiane Hamacher, CEO, Biocon Biologics as he said, “We believe Goldman Sachs’ capital infusion in Biocon Biologics demonstrates the confidence that large global institutions have in our capability to become a global leader in Biosimilars. With three of our products commercialized in the US market, we continue to strive towards expanding access for our patients and unlocking value for our shareholders. This capital injection by Goldman Sachs will enable us to make prudent investments in R&D, high-quality manufacturing, as well as, establish a global commercial footprint. We are confident of achieving our aspiration of serving 5 million patients through our biosimilars portfolio and attaining a revenue target of $1 billion by FY22, thereby creating value for our shareholders who have supported us in this journey.”

Som Krishna, a managing director in the Merchant Banking Division at Goldman Sachs also commented, “The global growth of biosimilars, coupled with collaborative regulatory pathways, is taking place at a rapid pace to drive market competition, budget sustainability for healthcare systems and improved patient access to treatments. Biocon Biologics, with a proven R&D track record and established worldwide strategic partnerships, is well-positioned to continue to grow and be a major global player in this dynamic segment of the pharmaceutical industry.”

According to another report by another news agency Mint, the company Biocon commented, “As per the terms of the proposed agreement, Goldman Sachs will be issued Optionally Convertible Debentures at a post-money equity valuation of USD 3.94 Billion.”

The company also added in their statement, “Biocon Biologics has the full spectrum of insulins (regular, basal and rapid) in its pipeline and the global scale necessary to make a difference to diabetes patients worldwide. With the demand for biosimilars set to grow as patents of originator biologics expire and patients demand lower-priced drugs, Biocon Biologics is well-positioned to expand access.”

Biocon Biologics has been developing high-quality, affordable biosimilars that make for easier reach for patients from across the earth to the best therapies that are present. The company also boasts of having a full range of insulin, regular, basal, and rapid, and has the potential to make the necessary difference for diabetes patients on a global scale.

Biocon Biologics’ Insulin Glargine was commercialized in the U.S., making it the only company from India to enable affordable access to three products for the patients in the United States through their partner firm Mylan. The products being a biosimilar monoclonal antibody (Trastuzumab), a therapeutic protein (Pegfilgrastim), and an Insulin analog (Glargine).

However, in the second quarter of the fiscal that ended on September 30th, the company posted a 23 percent drop in its consolidated net profit. The reported drop of ₹ 195.4 crore is mainly due to high expenses.