Biocon Biologics is looking to raise additional equity of $300 million by end of FY24 as it plans to further pare debt it has accumulated to fund the $3.3 billion acquisition of Viatris’ biosimilar business.

“We might want to take it another, maybe, maximum $300 million, so once we do that, we are in a very comfortable position where we have elbow room to do lot of business development like in-license of assets,” said Kiran Mazumdar-Shaw, executive chairperson, Biocon and Biocon Biologics, in an interview to ET.

Mazumdar-Shaw said she prefers to clean private equity investments but is also open to structured investment deals if it is beneficial to the company. Structured investment deals have an assured return component.

“What’s happened in terms of the global macroeconomics is that cash is no longer free, cash is now carrying a pretty large interest component. So when cash is expensive, people want structured deals. Today, every investor is looking for an assured return because they also have to account for the interest they pay on that money,” Mazumdar-Shaw said.

Biocon’s net debt which has peaked to $1.9 billion in December 2022, has reduced debt by around $650 million – through raising $270 million by stake sale in Syngene, conversion of $150 million loan to equity in Biocon Biologics by Serum and structured investments through structured deals worth $130 million by Kotak and $98 million by Edelweiss.

Mazumdar-Shaw said she is committed to Biocon Biologics’ initial public offering (IPO), but for the right valuation, she wants the company to meet certain triggers like the launch of its key biosimilar adalimumab in US, and the USFDA approvals of insulin aspart and bevacizumab, along with sustainable growth momentum.

“I think we have a very unique story, a unique profile, with a high growth potential. We have the opportunity to be a global leader in biosimilars,” Mazumdar-Shaw said.Biocon is gearing up to launch adalimumab (Humira biosimilar) in July this year. Adalimumab is used to treat auto-immune diseases like rheumatoid arthritis, Crohn disease, psoriasis, among others.

Mazumdar-Shaw said the business integration is progressing well, and she expects the acquired business to clock over $1 billion by end of FY24.

Mazumdar-Shaw added that Biocon Biologics will spend about 12% of revenue on research and development.

The company is investing in second wave biosimilars like denosumab, pertuzumab, ustekinumab, and aflibercept.

“Biosimilars, unlike generics, are expensive to develop, and require clinical trials to establish safety and similar efficacy, so comparison of our business model with generic drugmakers is not correct,” she said.

It costs about $50-100 million to develop biosimilar products for the global market, while it costs about $5 million to develop a generic drug.