homehealthcare NewsBiocon to use Syngene's stake sale to retire net debt, raises $1.2 bn debt for Viatris acquisition
Biocon to use Syngene's stake sale to retire net debt, raises $1.2 bn debt for Viatris acquisition
Kiran Mazumdar Shaw's shares insight into Biocon's financials and partnerships. The company's focus on reducing net debt and raising equity should help it achieve its long-term growth goals, she said, adding that its partnership with Serum Institute is expected to drive significant revenue growth in the coming years.
Biopharmaceutical company Biocon recently made headlines for partnering with Serum Institute of India (SII) and for the stake sale of its subsidiary Syngene. The firm is currently in the process of raising equity to further reduce its net debt.
Kiran Mazumdar Shaw, Executive Chairperson of Biocon and Biocon Biologics, told CNBC-TV18 on February 15, “The Syngene stake sale will be used to retire net debt and we are also in the process of raising equity to look at the overall reduction in acquisition debt,” she said.
Shaw also said her firm raised $1.2 billion in debt to fund its acquisition of global healthcare company Viatris. With addition $300 million existing debt in Biocon Biologics, Biocon's overall debt stands at $1.5 billion.
Biocon reported a net loss of Rs 41.8 crore for the third quarter that ended December 31, 2022 and a one-time loss of Rs 271.4 crore, according to an exchange filing. In the corresponding quarter last year, the company had posted a net profit of Rs 187.1 crore. CNBC-TV18 polls had predicted a profit of Rs 194.7 crore for the quarter under review.
In the December quarter, the firm’s total revenue stood at Rs 2,941.1 crore, up 35.3 percent against Rs 2,174.2 crore in the corresponding period of the preceding fiscal. A CNBC-TV18 poll had estimated the revenue to come in at Rs 2,677.1 crore.
Also Read | US FDA issues complete response letter for Biologivs license application filed by Biocon's partner Viatris
Shaw also pointed out that Serum Institute has invested $150 million in Biocon Biologics and has also provided a loan to fund the Viatris transaction. There is a possibility that Serum Institute might convert the loan into equity in the future.
The partnership between Biocon and Serum Institute also includes a deal on vaccine structure for which the latter has committed to $300 million of sales. Shaw noted that there is a demand for other vaccines when it comes to the SII tie-up, which bodes well for the partnership's future growth.
The stock was down 3.19 percent in the last one week and 5.55 percent in the past month.
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