Currency Volatility is now a Routine Occurrence: Kedar Upadhye, CFO, Biocon Biologics

Kedar Upadhye, CFO of an integrated biosimilars company Biocon Biologics, has adopted a two-pronged strategy – commercial acceleration through 5 launches in next 18 months and simplification of its balance sheet.

“During the acquisition (Viatris, in 2022), we issued multiple structured instruments with various terms and liquidity triggers. Simplifying the balance sheet means consolidating these instruments for better financial efficiency. Also, the parent entity Biocon Limited enhances its stake in its subsidiary Biocon Biologics, as part of these simplification measures,” he says.

Biocon purchased an additional 1.5% equity in Biocon Biologics for Rs 550 crore, which was completed in February 2025, increasing their ownership from 88.7% to 90.2%. 

In an interaction with FE CFO, Upadhye discusses his reasons behind the delay in IPO, his CFO strategy, and leadership mindset aligning cross-border teams. Edited excerpts.

What is the status of the Biocon Biologics IPO or potential merger with Biocon Ltd?

We're currently evaluating the best possible liquidity event given the state of markets and geopolitics. The Board of Biocon has formed a committee to evaluate the best option in the interest of shareholders and the business. 

Initially, a standalone IPO was planned. Now, we’re also examining the option of merging Biocon Biologics with Biocon Ltd. There are a few reasons which may justify this: joint commercialization of insulins portfolio including biosimilars and GLP-1 franchises, cost synergies, and avoidance of a holding company discount (refers to the reduced market valuation of a holding company compared to the sum of the market values of its listed subsidiaries or investments) that often occurs when both parent and subsidiary are listed separately. 

As mentioned, the Board’s committee is reviewing these options. This decision has to consider the economic interest of all stakeholders, including shareholders of the parent company, shareholders in the subsidiaries

You mentioned that Biocon Biologics is at an inflection point. What’s driving this momentum?

There are two key focus areas: one is driving business growth through market expansion, product launches, and regulatory clearances; the second is strengthening and simplifying the balance sheet through major refinancing and a QIP to ensure financial stability.

The first is business growth. Biosimilars is our largest segment at the group level, contributing to about 60% of the group’s revenue. We already have nine products in global markets, contributing to around $1.05 billion in revenue last financial year. 

Now we have planned five biosimilar launches over the next 18 months—three this year, already launched ustekinumab (autoimmune), will soon launch bevacizumab (oncology), and are awaiting approval for insulin aspart (diabetes), and two next year (denosumab and aflibercept). These launches are expected to provide a boost to the growth trajectory of the biosimilars business and generics. 

We're also seeing rising market shares post our acquisition two years ago (Viatris in 2022), which transformed Biocon Biologics from a developer and manufacturer into a global, vertically integrated commercial enterprise.

The second track is financial strategy. In October 2024, we completed one of India’s largest refinancing deals (Biocon Biologics refinanced $1.1 billion in long-term debt through USD bonds and a new syndicated facility to enhance liquidity, financial flexibility, and reinvestment capacity), followed by a major Rs 4,500 crore QIP in June 2025. This has given financial stability to the group. So, the focus is on both commercial growth and balance sheet simplification.

What's your outlook on revenue growth by therapy area (oncology, diabetes, immunology)?

Our portfolio is aligned with high-growth and high-consumption therapy areas like diabetes, immunology, and oncology. These segments, supported by upcoming launches, will drive strong growth in the next few years. Both existing and new products will contribute meaningfully.

We have also entered the ophthalmology segment with our Biosimilar Aflibercept, which is being launched in Canada in July. 

In the entire set of countries where we operate, we do expect strong growth in the coming years.

How are you handling pricing pressures in mature markets?

Pricing pressure is a reality in both generics and biosimilars. Although biosimilars have few players, the business does face competition, but pricing is relatively more protected. Our strategy is to offset price decline through volume growth, expansion into new geographies, and continuous new launches.

Our entire growth engine—from R&D to regulatory, manufacturing to commercial—is geared up to support this.

What expansion plans are underway globally?

In Europe, we have consolidated our presence in strong franchises in Germany, France, and Belgium, and are now looking to enhance the market shares of our products simultaneously in other parts of Europe, as well as the emerging markets where we already have a strong foothold. 

When we took over the business a couple of years ago, it had a limited footprint and was a small part of the larger portfolio then. We aim to scale higher on this new base. 

In the US, our market shares look strong. The same team under our new setup has achieved significantly higher market share for the same products. This success is rooted in their deep understanding of the industry, pricing dynamics, and handling the competitive intensity well, and we plan to replicate that strategy across all our markets.

Has the $3.3 bn acquisition (Viatris) in 2022 affected Biocon’s leverage? How are you addressing that amidst debt, dilution, and valuation concerns that linger?

The acquisition was funded partly through debt, resulting in what we call event-driven leverage. Biocon historically operated with net cash. But to transition into a global, fully integrated commercial entity, this move was necessary. It would have been expensive to fund entirely through equity due to the higher cost of equity. And the multiple steps taken in the last year, including the large refinancing and the latest QIP, place us well on the journey of deleveraging. 

Historically, Biocon has been a net-cash company, much like most major Indian pharma players who maintain strong cash balances. Before the acquisition, Biocon was in a similar position. 

But to evolve from being a science-based developer and manufacturer into a global integrated commercial player, we had to make a bold move. 

What’s been the impact of global economic uncertainty on your financial operations?

Currency volatility is now a routine occurrence, and we hedge our positions using appropriate instruments. Geopolitical events and tariffs are less predictable, but so far, they haven't significantly affected logistics or supply chains. Indian pharma, including biosimilars, plays a key role in US healthcare affordability, so we don’t expect major trade restrictions.

Biosimilars and generics manufactured in India are key tools for the US administration to improve drug affordability—approximately 40% of the volumes sold in the US are produced in India. So, we see India as a partner in access and affordability. Given this, we don’t expect any harsh regulatory changes—if anything, we anticipate a more benign and progressive approach.

How do you align cross-border finance teams at Biocon Biologics?

Shared purpose is critical. Whether someone is in New York, Bangalore, Brazil,  Malaysia, or the Middle East, we work as one team with shared values, priorities, and performance expectations. Frequent communication and a clear understanding of financial goals and governance norms help maintain alignment.