Viatris stock tumbled Monday after reporting mixed fourth-quarter earnings and a $3.34 billion plan to sell its biosimilars portfolio to Biocon Biologics.
The Biocon deal includes products expected to bring in $875 million in sales and generate adjusted earnings of $200 million this year. Viatris, a generic drugmaker, plans to use the proceeds to help accelerate Phase 1 development of some products.
But investors hammered Viatris stock on today's stock market. Shares collapsed 24.3%, ending the regular session at 11.01. Viatris also reported fourth-quarter profits that lagged expectations, though sales were in line.
Viatris Stock: Biocon Deal Signed Following Review
The company signed its Biocon deal following a strategic review. Viatris will receive $3 billion up front in cash and equity when the deal closes in the second half of the year. The company will also receive up to $335 million in additional cash payments expected to be paid by 2024.
Viatris will own at least 12.9% of Biocon Biologics, which is planning to file an initial public offering in India as early as late 2023. Viatris President Rajiv Malik will sit on Biocon's board.
"We believe we are well positioned to leverage the proceeds generated by the transaction with Biocon Biologics to increase our future R&D (research and development) investments," Malik said in a written statement.
But Viatris stock fell on the Biocon deal and a mixed fourth-quarter report. Viatris sales popped 20% to $4.34 billion and were in line with projections, according to FactSet. But adjusted profit of 80 cents per share lagged by 3 cents. Still, earnings inched up more than 5% year over year.
For the year, Viatris expects $17 billion to $17.5 billion in sales. Viatris stock analysts expected $17.57 billion in sales.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
