Biocon shares jump as unit signs long-term deal with Eris Lifesciences

Biocon shares extended their intraday gains in late afternoon deals on Thursday after the biopharmaceuticals firm said its subsidiary, Biocon Biologics, had entered into a long-term commercial collaboration deal with Eris Lifesciences. The Biocon stock jumped by as much as Rs 13.9, or 5.5 per cent, to Rs 267 apiece on BSE in the final 20 minutes of trade after the news. 

As part of the agreement, Biocon Biologics, a fully integrated global biosimilars company, will expand patient access to its portfolio of metabolics, oncology and critical care products in the country, Biocon said in a regulatory filing.

While the total transaction value of the deal stood at Rs 1,242 crore, the collaboration was in line with Biocon Biologics’ strategy to unlock value from its legacy business of branded formulations built over the past two decades, and extended its existing partnership with Eris for Biocon’s Nephrology and Dermatology business announced in December, it added. 

Biocon Biologics will continue to leverage Eris Lifesciences' strong commercial footprint to significantly expand patient access to its world class biosimilars in the country, as part of the deal, with the transaction expected to come into effect before April 15 subject to customary closing conditions. 

Here are some key highlights of the development: 

• The transaction value represents an accretive multiple of 3.4x of revenues and 18x of EBITDA 
• Over 430 employees associated with the business are expected to transition to Eris, ensuring continuity for both employees and patients
• Biocon Biologics has signed a 10-year supply agreement with Eris 

“This strategic collaboration with Eris Lifesciencesfor our portfolio of Metabolics, Oncology, and Critical Care products in India aligns with our commercial strategy to maximise patient reach and market potential. It builds on the success of our existing partnership with Eris for our Nephrology and Dermatology products and will allow us to deliver our high quality, lifesaving biosimilars to millions of patients in India," said Shreehas Tambe, CEO and Managing Director, Biocon Biologics.

Biocon Biologics remains committed to a successful transition of employees of these business units, its product brands, and customers to ensure continuity for patients, Tambe added.