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Mumbai: Biocon Biologics is looking to pare another $300 million acquisition debt in the next one year, and will explore various options to achieve its plans, chairperson Kiran Mazumdar-Shaw told ET in an interview. "We have an acquisition debt, and we do need to reduce that debt by about $300 million in the next 12 months, which will put us in a strong financial position," said Mazumdar-Shaw. She declined to comment on whether the company will raise equity to reduce its debt, stating only that various options are being considered.
Biocon Biologics refinanced $1.1 billion debt last month, strengthening its financial position and giving more flexibility for managing debt in the future, she said. "It would have been very challenging to actually service the principal amount.
Now, this (debt refinance) gives us that time to build the business and then make sure that we can afford to pay up our acquisition debt," Mazumdar-Shaw said. Biocon Biologics refinanced $1.1 billion (Rs 9,347 crore) long-term debt through US five-year dollar bonds and new syndicated facility.
This included $800 million senior secured notes due 2029 at a coupon of 6.67%. The debt refinance helped save around 20-25 basis points in interest costs.
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The deal was funded through $1.2 billion debt and up to $335 million as additional payments expected to be paid in 2024. The biologics division has net debt of about $1.
2 billion. The company repaid $250 million debt during FY24. Biocon holds 70% of BBL, while Viatris is the second-largest shareholder with 14%.
The rest is held by Serum Institute of Life Sciences and private equity funds. Mazumdar-Shaw said the Biocon group business, which was muted, will see accelerated growth in the second half of FY25 led by sustaining momentum of biosimilar business and emerging opportunity in the insulin market, Syngene returning to growth, and recovery of generics in the later part of this fiscal, backed by the launch of new products. Biocon Biologics has a 20% market share for oncology products and in the mid-to-high teens for the insulin franchisee in the US market.
The company is awaiting USFDA inspection outcome for its Biocon Park facility in Bengaluru which was conducted in July. A positive outcome will help the company launch its Bevacizumab biosimilar in the US market. Mazumdar-Shaw said some competitors are opting out of the insulin market, focusing more on GLP-1 products.
"This presents a significant opportunity for Biocon as the largest insulin producer," she said. Biocon is investing $250 million to double insulin capacity in Malaysia to tap this market opportunity. Biocon posted consolidated revenue of ₹15,621 crore in FY24, including ₹8,824 crore from BBL, constituting a 57% revenue share.
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